The Land Value Tax in Jamaica: An Analysis and Options for Reform (2005)

In 1957, Jamaica converted its property tax from one based on the capital value of land and all improvements, to one based on just the unimproved value of land, i.e., to a land value tax. The adoption of the unimproved value of land as the base for Jamaica’s property tax was based on the 1944 recommendation of the Commission on Inquiry, chaired by the Honorable Simon Bloomberg. The recommendation was subsequently endorsed by the International Bank for Reconstruction and Development, but the implementation of this change was delayed because of the absence of a legal cadastre.2 The property system that existed in 1944 was a capital-based system in which both land and improvements were subject to property taxation. However, the tax relied on self-assessment by owners; each owner was required to declare the true and correct description and value of his property (Chang 1966). The Collector of Taxes could counter-assess those parcels for which he believed the owner had not provided the true and correct value. Risden (1979) reports that it was estimated that on average the assessed value was less than one-third of the fair market value of the property and that there was gross non-uniformity in the assessments. Chang (1966) reports there were two major factors associated with the introduction of the land valuation legislation. First, there was the belief that land value taxation does not tax what a person puts into land and it discourages the withholding of land from use. Second, the existing property tax system was highly unsatisfactory. In addition, according to Rosengard (1998), one of the principal objectives of this change was agrarian reform, along with a desire to shift the relative property tax burden from poor to wealthy landowners. Recently, the land value tax has become a revenue source dedicated to local governments. While collected by the national government, the revenue is returned to the parish from which the revenue was collected.