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Thread: Property Owners Taxation

  1. #1
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    Smile Property Owners Taxation

    Check this out first:The Government of Aruba presents its plans for the fiscal reform

    ORANJESTAD - On December 3, 2018, the government revealed their plans for the fiscal reform.

    During the presentation it was explained the the fiscal reform will include a two years transition time, in order to properly execute the fundamental changes into the tax system.

    • Phase 1 will deal with the personal taxes like income tax, wage tax and ground tax. It also includes taxes on products that can have a negative impact on consumers, like alcohol and on product that can cause health issues like tobacco, in order to reduce its use. These are called: “Sin taxes” The first phase will be executed as per January 1st 2019.
    • Phase 2 will be the indirect taxes, like BBO, import taxes and more “Sin taxes”
    • Phase 3 includes commercial taxes like profit taxes, dividend taxes and the reform on income taxes.
    • Phase 4 will be the implementation of tourism related taxes like room tax, car rental tax etc.

    Income taxes
    Phase 1 includes a reduction of the loan tax and income tax rates, making this fairer. This current rate is split in 14 brackets, with the reform this will be reduced to only 5 brackets. A 0% tax rate will apply to incomes up to Awg. 27.751,00 per year. This means that anybody with an monthly income of Awg. 2.300,00 (Awg. 27.751,00 yearly) will not pay any income taxes. Additionally the maximum rate will also be reduced from 58.95% to 52%. This will have a positive impact on all the 55 thousand income and loan tax payers on the island. About 30 thousand will not pay any income or loan tax anymore, which are mainly pensioners and all receiving income lower than the Awg. 27.751,00 yearly bracket. Additionally the 25 thousand tax payers will profit from the rate reduction.
    Ground tax
    The rate for ground tax, a tax paid by home and or property owners will also be adapted. The changes will be based on the value of the property; the lower the property value, the lower the rate, the higher the property value the higher the rate. A new and higher rate is also introduced, for foreigners not residing in Aruba and companies owning commercial properties. This will make the ground tax rates more reasonable. A rate reduction for a single home owner while increasing the rate for those owning more properties or high valued properties. The current rate is 0.4% for everybody, residents or non-residents owning condos in Aruba-
    The rate changes include a 0% tax rate for property valued up to Awg. 120.000,00
    Those owning a property valued between Awg. 120.000,00 and Awg. 250.000,00 will notice an reduction of 50%, from 0,4% to 0,2%.
    Those owning a property valued between Awg. 250.000,00 and Awg. 500.000,00 will receive a reduction of 25% from 0,4% to 0,3%
    Property owners with a home valued between Awg. 500.000,00 and Awg. 750.000,00 will see no changes in their ground tax rates, however since the Awg. 60.000,00 current reduction will no longer be applied, it will cause an increase of Awg. 240,00 per year.
    Homeowners with a home valued above Awg. 750.000,00 will see an increase in their ground tax with 50%, from 0,4% to 0,6% This group will on the other hand see a bigger reduction of their loan tax as stated previously. Meanwhile, those not residing in Aruba, but have properties like condominiums, will also notice an increased rate to 0,6%. These companies will be compensated with a reduced rate on their dividend tax.
    The impact of the reform will be vast; 12.000 homeowners will no longer pay any ground taxes, 16.000 homeowners will see a reduction on their rate, 1.800 non-residents will see an increase and 2.100 homeowners with property valued over Awg. 500.000,00 will see an increase while enjoying a reduction of their wage taxes. About 1.800 companies will notice an increase but will also be compensated with the reduction of their dividend tax from 25% to 10%


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  2. #2
    Senior Member Aruba4ever's Avatar
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    I love almost everything about Aruba...minus their tax rates.

  3. #3
    Senior Member lucky's Avatar
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    Looks like their trying to get more and more of their budget(through assorted taxes)from tourists/Americans and less from residents.Would like that here in nj
    Last edited by lucky; 12-29-2018 at 12:55 PM.
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    Senior Member robin's Avatar
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    I spoke with our realtor and for us the rate will go up from .04% to .06%. Our condo would be the .06% even if it was Arubian owned because of what they value it at in Florins. It is still a lot less expensive than what I pay at home.




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  5. #5
    Senior Member schexc's Avatar
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    Is the current property tax reduction going away for all property owners or just the ones in the Awg. 500,000-750,000 and Afl. 750,000 and up groups?
    Last edited by schexc; 12-30-2018 at 09:44 AM.




    OUR COUPLE'S RETREAT. THE PEARL CONDO HOTEL EAGLE BEACH. CONDO ACCOMMODATES TWO ADULTS. YOU MUST REQUEST UNIT #8. https://photos.app.goo.gl/lRquP1F4VtxyZhR42 RENTING DIRECTLY http://www.thepearlaruba.com/. SEND PM BEFORE BOOKING FOR REFERRAL.
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  6. #6
    Senior Member robin's Avatar
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    My understanding is All non Arubans will pay .06% no matter the value. For Arubans the % is based on value up to .06%.




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  7. #7
    Senior Member schexc's Avatar
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    Yes...but what about this line?

    60.000,00 current reduction will no longer be applied.

    Does that go completely away for everyone?




    OUR COUPLE'S RETREAT. THE PEARL CONDO HOTEL EAGLE BEACH. CONDO ACCOMMODATES TWO ADULTS. YOU MUST REQUEST UNIT #8. https://photos.app.goo.gl/lRquP1F4VtxyZhR42 RENTING DIRECTLY http://www.thepearlaruba.com/. SEND PM BEFORE BOOKING FOR REFERRAL.
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    Senior Member robin's Avatar
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    I don't know. I think it means a 50% increase in our taxes plus about $133 US dollars, but I believe according to our realtor it will not go into effect until 2021. I'm not happy about the Aruban increase, but it is still so much less than we are paying at home and I don't have a beautiful beach I can walk to, or a pool, and great weather I just try to keep it in perspective. (We are paying over $2.67 per $100 at home, meaning my home which is under assessed at $295,000 costs us in taxes plus trash/recycling pick up(additional) over $8,000.00 a year.).

    Quote Originally Posted by schexc View Post
    Yes...but what about this line?

    60.000,00 current reduction will no longer be applied.

    Does that go completely away for everyone?




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  9. #9
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    Exactly! When I compare what I was paying in taxes for our condo in Florida to what l’ll Be paying in Aruba, it’s still considerably cheaper. And, in Florida the taxes would generally go up every year if you were not considered a homesteader.

    I’m not sure how close Aruba is to meeting its goal of 100% renewable energy by the year 2020, but lower electricity bills would be nice.
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  10. #10
    Senior Member schexc's Avatar
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    I agree. Our taxes in NYS are insane. We're paying more than $2000.00 above your's. Aruba's land taxes are a gift in comparison!!! Our HOI on the island is also roughly one fourth the cost too.

    Quote Originally Posted by robin View Post
    I don't know. I think it means a 50% increase in our taxes plus about $133 US dollars, but I believe according to our realtor it will not go into effect until 2021. I'm not happy about the Aruban increase, but it is still so much less than we are paying at home and I don't have a beautiful beach I can walk to, or a pool, and great weather I just try to keep it in perspective. (We are paying over $2.67 per $100 at home, meaning my home which is under assessed at $295,000 costs us in taxes plus trash/recycling pick up(additional) over $8,000.00 a year.).




    OUR COUPLE'S RETREAT. THE PEARL CONDO HOTEL EAGLE BEACH. CONDO ACCOMMODATES TWO ADULTS. YOU MUST REQUEST UNIT #8. https://photos.app.goo.gl/lRquP1F4VtxyZhR42 RENTING DIRECTLY http://www.thepearlaruba.com/. SEND PM BEFORE BOOKING FOR REFERRAL.
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