GEISHA KOW­LESSAR ALON­ZO

The in­tro­duc­tion of the land­lord busi­ness sur­charge un­der the Fi­nance Bill, 2025, has sparked in­tense na­tion­al de­bate, as lead­ing voic­es—in­clud­ing econ­o­mist Dr Ronald Ramkissoon, As­so­ci­a­tion of Re­al Es­tate Agents (AREA) Pres­i­dent Sal­ly Singh and the T&T Coali­tion of Ser­vices In­dus­tries (TTC­SI) pres­i­dent Di­anne Joseph—warn that while the mea­sure aims to strength­en Gov­ern­ment rev­enue and pro­mote tax eq­ui­ty, it risks deep­en­ing fi­nan­cial strain with­in an al­ready frag­ile rental hous­ing mar­ket.

While the Gov­ern­ment de­fends the mea­sure as a sur­charge on com­mer­cial rev­enue, these stake­hold­ers col­lec­tive­ly cau­tion that the added fi­nan­cial bur­den on prop­er­ty own­ers would al­most cer­tain­ly be passed di­rect­ly to ten­ants through rent in­creas­es, si­mul­ta­ne­ous­ly dis­cour­ag­ing in­vest­ment and threat­en­ing to shrink the sup­ply of af­ford­able rental prop­er­ties. This con­sen­sus among mar­ket ex­perts high­lights the crit­i­cal and po­ten­tial­ly desta­bil­is­ing con­se­quences of the fis­cal re­form on the av­er­age cit­i­zen.

The Fi­nance Bill, passed in Par­lia­ment on De­cem­ber 5, in­tro­duces a sur­charge on rental in­come along­side manda­to­ry prop­er­ty reg­is­tra­tion. Land­lords will now pay 2.5 per cent on quar­ter­ly rental re­ceipts of $20,000 or less, and 3.5 per cent on amounts above that thresh­old. The leg­is­la­tion was tabled by Min­is­ter of Fi­nance, Dav­en­dranath Tan­coo.

In ad­di­tion, all land­lords must reg­is­ter with the Board of In­land Rev­enue, pay­ing a one-time fee of $2,500. Au­thor­i­ties ex­pect this reg­is­tra­tion alone to bring in at least $70 mil­lion. Link­ing these mea­sures to­geth­er, the gov­ern­ment has em­pha­sised that the tax is aimed at gen­uine rental in­come, dis­tin­guish­ing land­lords from home­own­ers who do not prof­it from their prop­er­ties.

For land­lords—par­tic­u­lar­ly small prop­er­ty own­ers who de­pend on rental in­come to cov­er mort­gages, main­te­nance, and every­day ex­pens­es—the new tax rep­re­sents a se­ri­ous chal­lenge. Many of these in­di­vid­u­als op­er­ate on thin mar­gins, and the added sur­charge com­bined with manda­to­ry reg­is­tra­tion fees could make it in­creas­ing­ly dif­fi­cult to make ends meet. What was once a man­age­able bal­ance be­tween in­come and costs may now re­quire dif­fi­cult ad­just­ments, with some land­lords forced to con­sid­er rais­ing rents or even ex­it­ing the rental mar­ket al­to­geth­er.

“I’m al­ready strug­gling to cov­er my mort­gage and ba­sic re­pairs,” said one small land­lord. “Now with this tax and reg­is­tra­tion fee, I don’t see how I can keep my ten­ants with­out rais­ing rent. It feels like I have no oth­er choice.”

Ramkissoon says con­cerns high­light the del­i­cate bal­ance pol­i­cy­mak­ers must strike be­tween fis­cal re­form and hous­ing sup­ply, adding that the bur­den of these costs may not be even­ly shared.

Larg­er land­lords may be able to ab­sorb the ad­di­tion­al ex­pense, but small­er prop­er­ty own­ers—many of whom re­ly on rental in­come to cov­er mort­gages and up­keep—are more like­ly to pass the costs on to ten­ants, Ramkissoon said, not­ing that this con­nec­tion be­tween land­lord ex­pens­es and ten­ant rents un­der­scores the po­ten­tial rip­ple ef­fect across the hous­ing mar­ket.

Warn­ing that the tax could dis­cour­age in­vest­ment in rental hous­ing, fur­ther tight­en­ing sup­ply in an al­ready con­strained mar­ket, the econ­o­mist not­ed that when land­lords de­cide it is no longer vi­able to re­main in the rental sec­tor, the re­duc­tion in avail­able hous­ing un­der­mines ef­forts to sta­bilise rents.

Link­ing this to broad­er mar­ket dy­nam­ics, Ramkissoon stressed that re­strict­ing sup­ply in­evitably dri­ves prices high­er.

Be­yond fis­cal pol­i­cy, Ramkissoon em­pha­sised the im­por­tance of con­sumer be­hav­iour.

He ar­gued that ten­ants and buy­ers must be­come more dis­cern­ing in their choic­es, not­ing that con­sumer ed­u­ca­tion could help shape de­mand in ways that ease pres­sure on the mar­ket.

This per­spec­tive ties the role of pol­i­cy with the re­spon­si­bil­i­ty of con­sumers, sug­gest­ing that both sides must act wise­ly to avoid wors­en­ing the hous­ing cri­sis.

Ramkissoon urged pol­i­cy­mak­ers to tread care­ful­ly, bal­anc­ing the need for rev­enue with the re­al­i­ties of sup­ply and de­mand.

His warn­ing con­nects to a cen­tral prin­ci­ple of mar­ket eco­nom­ics: if sup­ply is re­strict­ed, prices will rise.

Will land­lords pass the tax­es on to their ten­ants?

This un­cer­tain­ty is al­ready be­ing felt among mem­bers of the TTC­SI.

Joseph ex­plained that dis­cus­sions with land­lords and ten­ants re­veal a mix­ture of cal­cu­la­tion and con­cern.

She not­ed that four out of six land­lords sur­veyed in­di­cat­ed they are ac­tive­ly con­sid­er­ing trans­fer­ring the bur­den, though they re­main un­de­cid­ed on whether it would be a par­tial cost-shar­ing mod­el-a 50/50 cost- or a full trans­fer.

Two oth­ers are adopt­ing a “wait-and-see” ap­proach, pre­fer­ring to first quan­ti­fy the im­pact on their fi­nan­cial state­ments be­fore mak­ing a move.

Joseph stressed that com­pli­ance is key, but im­ple­men­ta­tion would de­ter­mine whether the new frame­work suc­ceeds or fails.

“We be­lieve there must be stan­dards and codes to pro­tect those who pay rent to land­lords, and a reg­is­ter or data­base of land­lords is a sound idea for a mod­ern reg­u­la­to­ry en­vi­ron­ment. Once there is com­pli­ance, fear should be re­placed by as­sur­ance,” she said.

For ten­ants, how­ev­er, the is­sue is not the­o­ret­i­cal.

Five out of six ten­ants in TTC­SI’s dis­cus­sions in­di­cat­ed that any in­crease in rent would lead to fi­nan­cial strain.

These house­holds op­er­ate on tight bud­gets, where even a small in­crease could mean falling in­to ar­rears on food, util­i­ties, or ed­u­ca­tion.

While ten­ants ac­knowl­edge the pos­i­tive in­tent be­hind the leg­is­la­tion—par­tic­u­lar­ly the promise of stan­dard­ised ten­an­cy agree­ments and pro­tec­tions—they re­main wary of how land­lords would re­spond.

Joseph how­ev­er, wel­comed Tan­coo’s com­mit­ment to re-es­tab­lish a rent as­sess­ment board, not­ing that such a mech­a­nism would be vi­tal for ten­ants to chal­lenge ar­bi­trary rent hikes or poor hous­ing con­di­tions.

AREA re­sponds

Singh ac­knowl­edged the gov­ern­ment’s es­sen­tial need to find sus­tain­able sources of in­come and the need to nav­i­gate an in­creas­ing­ly chal­leng­ing eco­nom­ic en­vi­ron­ment.

In il­lus­trat­ing the im­pact of the 3.5 per cent sur­charge she con­sid­ered an av­er­age two-bed­room un­fur­nished apart­ment rent­ed at $2,000 per month.

The an­nu­al rental in­come to­tals $24,000, on which a 3.5 per cent sur­charge amounts to $840 per year.

On the high­er end of the mar­ket, a fur­nished two-bed­room apart­ment rent­ed at $7,000 per month would in­cur an an­nu­al sur­charge of $2,940. 

“The im­pli­ca­tions of this sur­charge un­der the new Fi­nance Bill will how­ev­er, un­doubt­ed­ly af­fect the rental mar­ket. One of the pri­ma­ry con­cerns is that the tax is ap­plied to gross in­come, not net in­come. This struc­ture places land­lords in the low­er and mid­dle seg­ments of the mar­ket at a par­tic­u­lar dis­ad­van­tage. Many of these prop­er­ty own­ers are al­ready con­tend­ing with high main­te­nance costs, fluc­tu­at­ing oc­cu­pan­cy lev­els, and mort­gage oblig­a­tions. Un­der the new tax­a­tion, they may find them­selves in a worse fi­nan­cial po­si­tion than they were last year, es­pe­cial­ly when com­bined with per­sis­tent in­fla­tion,” Singh ex­plained.

She al­so agreed that the like­ly out­come is that many land­lords would pass these in­creased costs on to ten­ants, re­sult­ing in high­er rental rates.

“Renters in the low­er-in­come brack­et are es­pe­cial­ly vul­ner­a­ble. With the added fi­nan­cial pres­sure, some land­lords who cater to this seg­ment of the mar­ket may de­cide to ex­it the in­dus­try al­to­geth­er rather than take on ad­di­tion­al ex­pens­es, ad­min­is­tra­tive bur­dens, and the risk of se­vere penal­ties for non-com­pli­ance. This could fur­ther re­duce the sup­ply of af­ford­able rental units, shrink­ing the pool of avail­able hous­ing op­tions for those who need them most.

“Some cit­i­zens have ex­pressed con­cern about be­ing taxed even when their an­nu­al rental in­come is be­low the per­son­al in­come tax al­lowance of $90,000, while oth­ers are won­der­ing whether this mea­sure amounts to dou­ble tax­a­tion,” Singh fur­ther not­ed.

She al­so point­ed out that this sur­charge does have some ben­e­fits, as it would cer­tain­ly boost gov­ern­ment rev­enue and help bring greater struc­ture and for­mal­i­ty to the rental sec­tor—ad­vances that could im­prove da­ta col­lec­tion and long-term plan­ning.

How­ev­er, she main­tained high­er rental costs and re­duced sup­ply could place ad­di­tion­al strain on ten­ants, and there is a re­al pos­si­bil­i­ty that an un­der­ground rental mar­ket may emerge, forc­ing vul­ner­a­ble con­sumers in­to un­safe or sub­stan­dard liv­ing con­di­tions.

As an as­so­ci­a­tion, Singh added AREA re­mains com­mit­ted to en­gag­ing con­struc­tive­ly with pol­i­cy­mak­ers to en­sure that any mea­sures in­tro­duced strike the right bal­ance be­tween na­tion­al rev­enue needs and the long-term sus­tain­abil­i­ty of the rental hous­ing sec­tor. She said a fair, trans­par­ent, and eco­nom­i­cal­ly sound pol­i­cy frame­work is es­sen­tial for pro­tect­ing both prop­er­ty own­ers and the thou­sands of cit­i­zens who de­pend on af­ford­able rental hous­ing.