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View Full Version : Non-Resident Condo Property Taxes Increasing by 50% on January 1, 2019



JohnMtl
12-05-2018, 11:51 PM
I haven’t heard anybody on here talk about the increase in condominium property taxes for non-residents announced by the prime minister earlier this week.


The rate will go from 0.4% to 0.6% effective January 1, 2019 . That’s a 50% increase.


This not only punishes those who have shown faith in Aruba by making it their part-time home but sends a warning to future investors.


It’s a shame that this new government can’t find innovative means of increasing revenues or reducing costs without implementing such drastic measures.

Comments?

*It does seem that the tax increases have been applied to reduce the burden on lower income residents. So, there is some good.


“GRONDBELASTING PA ESNAN DEN EXTERIORDi otro banda, esnan cu no ta biba na Aruba, pero tin propiedad na Aruba, manera condominium, ta bay paga un tarifa mas halto, 0.6% pa asina contribui na economia di nos pais. Companianan cu tin propiedad commercial tambe, lo mira un aumento di tarifa na 0.6%. Pero di otro banda, nan ta bay haya un rebaho di e belasting riba dividend. “

link to the entire news article (sorry, not translated):

https://www.noticiacla.com/news/14431

Aruba4ever
12-06-2018, 06:56 AM
How much in real dollars?

JohnMtl
12-06-2018, 07:57 AM
How much in real dollars?

It depends on what your condo is valued at.
Whatever you are paying now +50%.

robin
12-06-2018, 11:21 AM
I haven't heard that yet.

Aruba4ever
12-06-2018, 02:41 PM
If its 50% of a big number that means more than 50% of a figure that is minimal...What are the yearly taxes? Are we talking an extra $100 or $1000? 50% stinks for sure but just trying to grasp the total amount.

Aruba4ever
12-06-2018, 02:46 PM
I answered my own question- here is the info. The previous tax appears to be 0.4% or $4 per $1000 of value. So if you condo was worth 400,000 your increase would be $800 if my math is accurate. Sounds like a $200 increase per hundred thousand of value.

robin
12-06-2018, 02:57 PM
I wonder if it is just condo or if it will apply to homes owned by non residents.

Aruba4ever
12-06-2018, 08:32 PM
My guess it will be all non Aruba owners- if its not now it will be the next time they need more tax dollars is my thought. There are MANY more condo owners than home owners I would think so its affecting many.


I wonder if it is just condo or if it will apply to homes owned by non residents.

schexc
12-06-2018, 09:20 PM
I’m trying to understand the message this portrays to Aruba’s tourism industry and foreigners that invest here?

Aruba4ever
12-06-2018, 10:44 PM
50% increases is not a good business model for sure. I am hoping its a one time thing..but we all know taxes are never one time increases :(


I’m trying to understand the message this portrays to Aruba’s tourism industry and foreigners that invest here?

elephant_guy
12-08-2018, 07:41 AM
English language explanation of tax changes. Applies in the most part to both residents and non residents. Despite having to accept a big increase here myself, it's good to see Aruba making some things a bit better for it's poorest citizens whilst trying to make fiscally prudent decisions and attempting to pay off some of its very large deficit which has ballooned over the past few years.

https://www.overheid.aw/news/news_3809/item/the-government-of-aruba-presents-its-plans-for-the-fiscal-reform_38437.html

GETA62
12-08-2018, 02:15 PM
They will raise property tax from 0.4 to 0.6% for non-residents home and cindi owners.
Also the 6% tax will be included in the invoices and receipts to avoid double taxation.
and of course they will increase “sin” tax on alcohol and cigarettes.

Aruba4ever
12-08-2018, 02:38 PM
I will be honest it appears like the taxes have dropped big for the locals?



English language explanation of tax changes. Applies in the most part to both residents and non residents. Despite having to accept a big increase here myself, it's good to see Aruba making some things a bit better for it's poorest citizens whilst trying to make fiscally prudent decisions and attempting to pay off some of its very large deficit which has ballooned over the past few years.

https://www.overheid.aw/news/news_3809/item/the-government-of-aruba-presents-its-plans-for-the-fiscal-reform_38437.html

GETA62
12-08-2018, 02:46 PM
I will be honest it appears like the taxes have dropped big for the locals?


Yes, in the same article says that senior citizens will not pay taxes and property taxes will be reduced for local people, depends on the value of the property.

Andrea J.
12-08-2018, 04:38 PM
At one point, I read that Aruba is in the top 10% of the highest taxes in the world.

robin
05-15-2019, 03:38 PM
Our property tax bill has arrived at the condo complex and they emailed it to us.

The 60,000 florin exemption is gone, so:
2018
valued at 745,000 fl
tax 2,982 fl

2019
valued at 805,000fl(the exemption is gone)
tax 4,833fl

difference in tax 1,851 fl or about $1,057 US more (about $1704 US to about $2762 US)

Yes, it is a big jump, however; we are paying about $8,000 a year on our house and our house in the US is assessed less(luckily it is really under assessed) than the condo.

schexc
05-15-2019, 05:44 PM
Thanks For the post Robin. I’m sure ours will show up soon.

lucky
05-15-2019, 05:46 PM
Wow,60% increase

aquaman
05-16-2019, 03:50 PM
The tax office, Impuesto, has implemented a zero tolerance policy immediately . Many locals have not paid taxes in years. They were instructed to tighten up. Some discussions going on about things that I hope never get to see daylight. Talk of a non residency tax, possibly a one time surcharge. Amounts discussed are not paltry either.

robin
05-16-2019, 03:59 PM
All of that is scary. They must think we are all rich and don't realize owning in Aruba is a stretch for many people. Don't they realize that if you put a large tax on owner that those owners have less to spend in restaurants, stores, etc. and if the owners rent, they pass that tax cost on to the renters who now have less to spend on dining, tours, and shopping? Wouldn't it be better to encourage people to spend while on the island rather than tax them?

As far as locals not paying taxes, that is something I heard too. When we went to register the car we were told many locals had not registered their cars since the last time they changed the license plates and it is one of the reasons the lines were very long.



The tax office, Impuesto, has implemented a zero tolerance policy immediately . Many locals have not paid taxes in years. They were instructed to tighten up. Some discussions going on about things that I hope never get to see daylight. Talk of a non residency tax, possibly a one time surcharge. Amounts discussed are not paltry either.

aquaman
05-16-2019, 04:37 PM
All of that is scary. They must think we are all rich and don't realize owning in Aruba is a stretch for many people. Don't they realize that if you put a large tax on owner that those owners have less to spend in restaurants, stores, etc. and if the owners rent, they pass that tax cost on to the renters who now have less to spend on dining, tours, and shopping? Wouldn't it be better to encourage people to spend while on the island rather than tax them?

As far as locals not paying taxes, that is something I heard too. When we went to register the car we were told many locals had not registered their cars since the last time they changed the license plates and it is one of the reasons the lines were very long.
i agree with your logic. Already they raised nonresident owners tax by 50% from .4-.6%. I own 2 Villas and it is a chink for me. I'm not sure how they would implement the surcharge and if it would be on new purchases or apply to existing owners. Amounts like 25-30,000US have been kicked around. If it happens, I'm out of here I think

lucky
05-16-2019, 05:15 PM
I read somewhere the Aruban government is looking for only high end tourists and homeowners.Could be they’ll get their wish

robin
05-16-2019, 05:36 PM
I wish there was a way to form an organization of all non-resident property owners so we could ban together and make our voices heard to the government and business. Business owners on the island need to hear that if our money goes to taxes then our money to them goes away. It might be easy to organize condo complexes, but individual homeowners would be harder to locate.

Aruba4ever
05-16-2019, 09:41 PM
I agree with you regarding the extra taxes/penalties for being an owner. There is only so much money each person has to "feed" their Aruba addiction and if you take money out of owners hand you are going to see 2 things happen. One is less money is spent out and about on the island and the other is many folks are going to sell and more will decide to rent to avoid the added headaches/costs- although I know the costs will be sent along to the tourists.


All of that is scary. They must think we are all rich and don't realize owning in Aruba is a stretch for many people. Don't they realize that if you put a large tax on owner that those owners have less to spend in restaurants, stores, etc. and if the owners rent, they pass that tax cost on to the renters who now have less to spend on dining, tours, and shopping? Wouldn't it be better to encourage people to spend while on the island rather than tax them?

As far as locals not paying taxes, that is something I heard too. When we went to register the car we were told many locals had not registered their cars since the last time they changed the license plates and it is one of the reasons the lines were very long.

gaby
05-17-2019, 06:07 AM
We use to banter about buying in Aruba but why bother. You can only stay 6 months at a time unless you request residency. You have to deal with property upkeep, taxes, break ins if you are not there. Its easier to rent for whenever I want to go for how long I want to go within the rules of how long I can stay. The only way I would buy is if I didn't rent it out. I would want to just go whenever and leave my stuff there. No thank you, I will rent.

robin
05-17-2019, 09:04 AM
We use to banter about buying in Aruba but why bother. You can only stay 6 months at a time unless you request residency. You have to deal with property upkeep, taxes, break ins if you are not there. Its easier to rent for whenever I want to go for how long I want to go within the rules of how long I can stay. The only way I would buy is if I didn't rent it out. I would want to just go whenever and leave my stuff there. No thank you, I will rent.

We do leave all our stuff in the condo. There is an owner's closet and we put our stuff in there. Yes, there is stuff we bring back and forth-meds, a few items of clothing, my make-up(because I don't want it sitting for all that time). We rent because we want to not because we have to. I am not worried about break ins because we are on the 4th floor, it is gated with security, I don't have anything of real value and I have insurance. Yes, you have to maintain your home in Aruba but I maintain my home in NJ. The money we are spending is paying for our own place rather than us paying someone else to own their home.

schexc
05-18-2019, 07:47 AM
When we decided on Aruba for our condo purchase property taxes was at the bottom of our list in making the choice. We were looking for a place to escape our harsh/long Upstate NY weather, so being outside the hurricane belt was our first consideration. We didn't want to take a chance on owning something far away from our home in the states that could be destroyed by something that was out of our control or pay higher home owners insurance for the same reason. Next we looked at relative safety and and crime rates, Aruba checking that box as one of the safest in the Caribbean. Next on the list was the friendliness of the locals, and for those that travel there we think that speaks for itself, as it's really tough to not feel welcomed on the island. Since we had planned to stay on the island for longer stretches of time, we also wanted a location that was a little Americanized, yet diverse in it's landscape and Aruba checked that box too. So then we spent a number of years looking at properties in different locations that fit our budget, and finally ended up where we are today. Initially we thought that we would never rent our property, but after furnishing it locally and getting a feel for how the management company functioned, we gave it a try and after two years running we've yet to have an incident and the income is a nice perk. We have enough storage to leave our belongings locked away and at our age traveling for weeks/months at a time with only a carry on makes it so much easier. At this point we have no regrets, and would do it again in a heart beat.

Now to the property tax situation, which is the topic. It is safe to say that we all pay property taxes in some fashion, whether through ownership or renting, be it thorough our primary residence, vacation home, income property or business, to name a few. Aruba in comparison to where we live in the states, is a bargain and with the tax increase is still a bargain in comparison. Where the government is making a mistake, IMHO, is that that they are charging a higher rate to the hand that feeds them and I think that it gives the wrong impression to foreign investors. It's similar to the same mind set for the booting and towing of tourists when they initiated the paid parking system...well sort of. If you want to deter the tourist from visiting or investing in a foreign country, then either piss them off or segregate them with higher fees and you'll be successful at doing so. Has all of this changed our thoughts of purchasing there...not yet. It will be interesting to see how it all plays out in the long run, just like the paid parking. Maybe the government will notice a shift in foreign investment and make adjustments and maybe they won't. All in all we're very happy with our purchase and look forward to many years of usage, and that's what it's all about...for us:)

Andrea J.
05-18-2019, 08:55 AM
your words........... "Where the government is making a mistake, IMHO, is that that they are charging a higher rate to the hand that feeds them and I think that it gives the wrong impression to foreign investors. It's similar to the same mind set for the booting and towing of tourists when they initiated the paid parking system...well sort of. If you want to deter the tourist from visiting or investing in a foreign country, then either piss them off or segregate them with higher fees and you'll be successful at doing so."

EXACTLY!!!!!!
Well said.

robin
05-18-2019, 10:00 AM
This is perfectly said. I could have written myself(but NJ not NY), but you did a much better job. One thing I should have before, the value of our condo would be in the 6% tax rate whether a resident or a non resident owned it.



When we decided on Aruba for our condo purchase property taxes was at the bottom of our list in making the choice. We were looking for a place to escape our harsh/long Upstate NY weather, so being outside the hurricane belt was our first consideration. We didn't want to take a chance on owning something far away from our home in the states that could be destroyed by something that was out of our control or pay higher home owners insurance for the same reason. Next we looked at relative safety and and crime rates, Aruba checking that box as one of the safest in the Caribbean. Next on the list was the friendliness of the locals, and for those that travel there we think that speaks for itself, as it's really tough to not feel welcomed on the island. Since we had planned to stay on the island for longer stretches of time, we also wanted a location that was a little Americanized, yet diverse in it's landscape and Aruba checked that box too. So then we spent a number of years looking at properties in different locations that fit our budget, and finally ended up where we are today. Initially we thought that we would never rent our property, but after furnishing it locally and getting a feel for how the management company functioned, we gave it a try and after two years running we've yet to have an incident and the income is a nice perk. We have enough storage to leave our belongings locked away and at our age traveling for weeks/months at a time with only a carry on makes it so much easier. At this point we have no regrets, and would do it again in a heart beat.

Now to the property tax situation, which is the topic. It is safe to say that we all pay property taxes in some fashion, whether through ownership or renting, be it thorough our primary residence, vacation home, income property or business, to name a few. Aruba in comparison to where we live in the states, is a bargain and with the tax increase is still a bargain in comparison. Where the government is making a mistake, IMHO, is that that they are charging a higher rate to the hand that feeds them and I think that it gives the wrong impression to foreign investors. It's similar to the same mind set for the booting and towing of tourists when they initiated the paid parking system...well sort of. If you want to deter the tourist from visiting or investing in a foreign country, then either piss them off or segregate them with higher fees and you'll be successful at doing so. Has all of this changed our thoughts of purchasing there...not yet. It will be interesting to see how it all plays out in the long run, just like the paid parking. Maybe the government will notice a shift in foreign investment and make adjustments and maybe they won't. All in all we're very happy with our purchase and look forward to many years of usage, and that's what it's all about...for us:)

schexc
05-18-2019, 07:46 PM
True, but without looking back and the new tax law, would you still have gotten the exemption? Sorry, just me being on the lazy side tonight.

robin
05-18-2019, 09:05 PM
I think they totally did away with the exemption. Their value of the condo with the exemption was 745,000 florins. I am pretty sure that anything over 500,000 florins is at the 6%.

schexc
05-19-2019, 08:15 AM
I reread the article this morning and is does state that the 60,000 fl deduction no longer applies, but they grouped into another paragraph, so I couldn’t tell if it meant to all, including residents. Like you said, it looks like it is gone to all.

jfltdoc
06-16-2019, 07:25 PM
I've just been informed through our property management company that, on top of the annual property tax increase, the Arubian tax authorities are now requiring tax payments for rental income (i.e. the "tourist tax") to be paid in name of the home owner, IN PERSON, MONTHLY at the tax office. Our property manager also noted that they are "therefore legally obliged to register you as the homeowner for the tourist tax payments and we must do the monthly tax payment on your behalf." They will do this for a charge, of course.

The point here is that the Arubian government is finding a more inconvenient way to collect taxes and, at the same time, make it more inconvenient (or expensive), for non-residents to continue investment in their country.

It will be interesting to see when/where the tipping point is reached.

schexc
06-16-2019, 09:31 PM
Our management company since 2017 has been collecting and paying the tourist tax on our behalf. Up to this point they have not been charging any additional fees for this service, as it is part of the managements commission fee.

aquaman
06-17-2019, 06:50 PM
I've just been informed through our property management company that, on top of the annual property tax increase, the Arubian tax authorities are now requiring tax payments for rental income (i.e. the "tourist tax") to be paid in name of the home owner, IN PERSON, MONTHLY at the tax office. Our property manager also noted that they are "therefore legally obliged to register you as the homeowner for the tourist tax payments and we must do the monthly tax payment on your behalf." They will do this for a charge, of course.

The point here is that the Arubian government is finding a more inconvenient way to collect taxes and, at the same time, make it more inconvenient (or expensive), for non-residents to continue investment in their country.

It will be interesting to see when/where the tipping point is reached.


We knew it was coming. Our PM company today announced they need to charge us to perform this service due to the manpower it will take and the time to pay at the tax office each month. This is in addition to their normal PM fees. The discussion of a one-time nonresident lump-sum tax is still in discussion. the amount of $25,000 or $30,000 is being considered. Only for nonresidents.

schexc
06-17-2019, 07:10 PM
That would pin the tail on the donkey...!:mad:


We knew it was coming. Our PM company today announced they need to charge us to perform this service due to the manpower it will take and the time to pay at the tax office each month. This is in addition to their normal PM fees. The discussion of a one-time nonresident lump-sum tax is still in discussion. the amount of $25,000 or $30,000 is being considered. Only for nonresidents.

schexc
06-17-2019, 07:15 PM
We got our new property tax bill last week and it went up as expected, but now we find that the accessed value is not correct and we have to find out how to get that corrected...it's over accessed by at least 140,000.00 florins.

Aruba4ever
06-17-2019, 08:16 PM
Ouch! I wonder if they are using the recent sale prices as a new base? Congrats on your investment as I have seen some of the prices the resales....way more than the original price.


We got our new property tax bill last week and it went up as expected, but now we find that the accessed value is not correct and we have to find out how to get that corrected...it's over accessed by at least 140,000.00 florins.

schexc
06-17-2019, 09:49 PM
It was over accessed last year and no one caught it, so I don’t think I think it’s a reassessment. My understanding was that the assessment was for five years, but I guess we’ll find out.

schexc
07-28-2019, 09:50 AM
A little more info on our property tax situation...

Our Management Company has been guiding us with our situation. It looks like our assessment is off about $115,000.00 US and our unit is the only one at The Pearl that this change applied to. We have to make an appointment with the tax office next trip to get this corrected and most likely file an Objection Letter. In the mean time we've been making the required tax payments, hoping to get it corrected before the end of the year.

With regard to the Non-Resident property tax increases this year; we were also told that there is a group formed that is filing a complaint against the increase in property taxes as applied to Non-Residents. We really don't know that much about it or who the group is, but it will be interesting to see how it plays out. I'm sure we'll find out more next visit.

robin
07-29-2019, 03:07 AM
A little more info on our property tax situation...

Our Management Company has been guiding us with our situation. It looks like our assessment is off about $115,000.00 US and our unit is the only one at The Pearl that this change applied to. We have to make an appointment with the tax office next trip to get this corrected and most likely file an Objection Letter. In the mean time we've been making the required tax payments, hoping to get it corrected before the end of the year.

With regard to the Non-Resident property tax increases this year; we were also told that there is a group formed that is filing a complaint against the increase in property taxes as applied to Non-Residents. We really don't know that much about it or who the group is, but it will be interesting to see how it plays out. I'm sure we'll find out more next visit.

That is way off. I hope you can get this corrected with out too much effort. If you find out more info about the group, please let me know. It'll surely be interesting. It seems like have no real rights not being residents.

schexc
07-29-2019, 06:42 AM
Will do...


That is way off. I hope you can get this corrected with out too much effort. If you find out more info about the group, please let me know. It'll surely be interesting. It seems like have no real rights not being residents.

schexc
11-06-2019, 09:54 AM
After resolving our property assessment issues this trip, we can report our property tax increase.

For 2019 we lost our 120,000Afl. deduction off the assessed value, which was calculated as 60,000Afl. for each of us. Then with the tax increase to tourists, our net tax increase amounted to 139%. This was a huge difference, but if we compare to our tax rate in our home state of New York, it is still very inexpensive in comparison.

Andrea J.
11-06-2019, 11:52 AM
OUCH

if you were residents of Aruba, would there be a resident deduction?
After resolving our property assessment issues this trip, we can report our property tax increase.

For 2019 we lost our 120,000Afl. deduction off the assessed value, which was calculated as 60,000Afl. for each of us. Then with the tax increase to tourists, our net tax increase amounted to 139%. This was a huge difference, but if we compare to our tax rate in our home state of New York, it is still very inexpensive in comparison.

schexc
11-06-2019, 12:27 PM
I'm not sure if the 60,000Afl per spouse went away for residents. Perhaps someone local could answer that. I do know that the residents have a floating scale of tax rate percentage that they pay, where property owners that our Tourist Status do not. It is fixed.


OUCH

if you were residents of Aruba, would there be a resident deduction?

Aruba4ever
11-06-2019, 09:14 PM
That is a painful increase but you have the right perspective...its still cheap by US rates.

schexc
11-07-2019, 09:08 AM
The reality; it's at least 75% less then what we pay for a comparable assessment in our area of New York State.


That is a painful increase but you have the right perspective...its still cheap by US rates.

robin
11-07-2019, 07:29 PM
It really sounds worse than it is especially when it is compared to what we pay here. If we paid the same rate in Aruba that we pay here it would probably be many times what we are now paying with the increase.