VI Real Estate Taxes
The Virgin Islands Real Estate Tax Law that recently passed into Law is Act NO. 6991 and it states "All real estate subject to taxation must be assessed at 100% of fair market value."
- Unimproved non-commercial real estate at .004946
- Residential real property at .003770
- Commercial real property at .007110
- Timeshare real property at .014070
Property Tax Assessment in the U.S. Virgin Islands as taken from Lt Gov website
The duties of the Tax Assessor are described in Title 33, chapter 85, Section 2402 (a) through (d) of the Virgin Islands Code. The Tax Assessor interprets data by analyzing real estate transactions, comparing conditions of similar properties which were sold, and by analyzing the cost to replace a similar property. The Tax Assessor does not dictate values. The actual value is determined from the market. This is the most probable price that a property that has been exposed to the market for a reasonable amount of time should bring in an open market with neither buyer or seller under any undue pressure to buy or sell.
The Tax Assessor utilizes different approaches in determining value:
Cost Approach:This approach estimates current cost of replacement less accrued depreciation and adds the value of the land.
Income Approach: This approach is used primarily for income producing real property. It converts the present worth of future benefits into value by capitalizing the net income.
Sales Comparison Approach: Under this approach, property is compared to recent sales of similar properties on the open market.
In addition to analyzing the market data, appraisers from the Tax Assessor's offices physically visit properties to collect necessary data. In addition to determining the age, type and use of the property, the appraiser must also collect data to include: condition of property, size of the living area, number of floors, number of bathrooms, improvements made to the property and on-property amenities. In addition, an appraiser must also collect information on the features of the land: its topography, shape, size, accessibility and view. The data is gathered and the analysis of all the related approaches is then correlated to determine the actual value of real property.
The Virgin Islands’ assessment is at full (100%) market value. Act 6991 has changed the tax structure and set a different tax rate for four classifications of property.
(1) Unimproved non-commercial real property .004946
(2) Residential real property .003770
(3) Commercial real property .007110
(4) Timeshare real property .014070
The applicable rate is applied to the assessed value which results in a tax amount. (Title 33, Chapter 81, Section 2301 Amended)
Real property tax bills are issued to the person whose name appears as owner of real property on the records of the Recorder of Deeds on the last day of the tax year which is January 1, of each year. (Title 33, Chapter 85, Section 2410). If your property was sold after that date, the bill should be forwarded to the new owner.
Taxpayers may reduce their amount of tax by qualifying for one of the several credits, formerly known as exemptions, that are available to property owners. Property owners may qualify for the Homestead credit and any one other credit for which they are eligible. (Title 33, Chapter 81, Section 2305). To qualify for any of the above credits the property owner must be living in the home as a primary residence as of January 1.
These credits are as follows:
Homestead Tax Credit: An amount of $400.00 is deducted from the total amount of tax of those taxpayers owning and occupying real property as their primary residence.
Veteran Tax Credit: An amount of $650.00 is deducted from the total amount of tax of any honorably discharged veteran of the United States Armed Forces who owns and occupies real property in the Virgin Islands as his residence.
Senior Tax Credit: The amount of $500.00 may be deducted from the total amount of tax owed by of persons sixty (60) years and over who have an individual Annual Gross Income of less than $30,000.00 or household income of less than $50,000.00
Disabled Tax Credit: An amount of $500.00 may be deducted from the total amount of tax of property owners who have been found to suffer from a disability as determined by the Social Security Administration and who occupy the property as their primary residence. This credit is granted when individual Annual Gross Income is less than $30,000.00 or household income is less than $50,000.00.
Persons interested in applying for the tax credits must file an application with their respective Tax Assessor’s Office no later than April 30 of each year.
The Virgin Islands Code also provides for other credits which can reduce the taxes due:
Farmland Tax Credit:Title 33, Chapter 81, Section 2341 through 2350 provides that an amount equal to 95% of the real property tax may be deducted from the tax of any taxpayer on property used actively and solely for agricultural and horticultural purposes. The property should be located within an area on which agriculture is permitted according to zoning laws. The application must be submitted to the Department of Agriculture before October 1 of each year.
Economic Development Tax Credit: Title 29, Chapter 12, Section 713(a) subsection (a) provides that a credit up to 100 percent (as determined by the Economic Development Commission), may be deducted from the tax of any business owning real property in the Virgin Islands and that has received a certificate of exemption from the Virgin Islands Economic Development Commission.
Non-Profit Organization Credit: According to Title 33, Chapter 81, Sections 2355 (a) through 2355 (f). An amount equal to the total amount of real property taxes may be deducted from the bill of any real property owned by or held in trust for any non-profit organization. Such property is available to the general public for recreational uses, educational or scientific purposes, historic site or museum location or held for purposes such as preserving open spaces, greenbelt areas, buffer zones or natural preserves.
Class 1 Inheritance Tax Credit: Owners of unimproved real property who acquired said property by a Class 1 Inheritance as defined under Title 33 Chapter 1 section 1, but not by gift, purchase, survivorship or otherwise and the real property consists of five acres or less may receive a tax credit equal to 80% of the real property tax levied on the real property. The credit ceases after any improvement of more than $5000.00 is made.
Circuit Breaker Tax Credit: If the property taxes of a homestead or unimproved property have increased more than125 percent over the previous year, the property owner may qualify for a credit equal to forty percent (40%) of the real property tax increase for said property up to $5000.00. This credit is available for property owners whose household income is less than $135,000.00.
Other properties subject to exemption according to Title 33, Chapter 81, Section 2304, includes:
1. Properties of the United States Government
2. Properties of the U.S. Virgin Islands Government
3. Properties used exclusively for religious worship
4. All Cemeteries
Once all the applicable credits are granted, the end result is the amount due to the Virgin Islands government. Note that properties that are connected to the public sewer system must pay an annual sewer users fee. This fee is a part of the annual tax bill but is administered by the Waste Management Authority. (Title 19, Section 1534 Virgin Islands Code).
By law, tax bills are issued on or before June 30th of each year. Tax bills are mailed to the last known mailing address on file in the Tax Assessor's Office. It is the responsibility of the property owner to notify the Tax Assessor of their correct mailing address. In the event property owners do not receive their tax bill, it is their duty to report the same to the Tax Assessor. (Title 33, Chapter 85, Section 2411)
Property taxes are payable at the Office of the Tax Collector, a division under The Office of the Lieutenant Governor. Taxes become delinquent if not paid within sixty (60) days of issue. If taxes are paid after ninety days, they become delinquent, and an interest rate of one percent (1%) is added per month to the amount of tax that is due.
Appealing Your Tax Assessment
Pursuant to Title 33, Section 2451 of the Virgin Islands Code, any person aggrieved by the action of the Tax Assessor in relation to the valuation of his property may file a written complaint with the Board of Tax Review.
Appeal forms are available at the Office of the Tax Assessor and may be filed with the office on behalf of the Board of Tax Review. Prior to filing an appeal, however; taxpayers are encouraged to visit the Tax Assessor’s Office in their district where they will be shown all the details of their assessments and the method used in arriving at the valuation. Any errors found during this review will be corrected. Taxpayers who still wish to file an appeal after reviewing their valuation data will be provided with the appropriate forms.
Out-of-territory property owners may call the office to review their valuations. If they wish to proceed with an appeal after the review, the office will provide them with the appropriate forms as described above.
Conditions for filing an appeal:
- Taxpayers who wish to file an appeal must pay an amount equal to the amount of the prior year tax plus 50% of the difference between the previous year’s tax amount and the current tax year’s amount.
- Appeals that do not contain proof of payment will be dismissed by the Board of Tax Review.
Taxpayers must file the appeal by the fifteenth day after the tax becomes delinquent.