Condominium owners in the territory might want to hold off paying their property tax bill until new, corrected bills are issued. Some property tax bills sent out June 1 incorrectly used a commercial property tax rate of 0.711 percent, nearly double the residential tax rate of 0.377 percent.
Both tax rates are set in the 2019 edition of the U.S. Virgin Islands Code.
Lt. Gov. Tregenza Roach’s office issued a statement late Wednesday saying new tax bills were being printed. Neither Roach nor Tax Assessor Ira Mills, reached earlier by telephone, explained why the mistake was made.
“One of the things I don’t like to tell people is don’t pay their tax bill,” Mills said. “We would in fact send out supplemental tax bills so they can have new tax bills at the correct rates.”
The bills are due June 30.
Suzanne Mabe, a St. Thomas real estate agent and broker, said she heard from a property owner who paid their bill in person – not using the new payment web portal — and was given the correct rate. That’s not going to work for most off-island V.I. land owners.
She thinks the tax office’s new website is the culprit.
“Why they launched this right at the time the tax bills go out, I have no idea,” Mabe said. “It’s a software glitch.”
Mills said the issue was not caused by software problems with the portal but stemmed from a “communications issue.” He couldn’t say when the new bills would be in customer’s hands.
“Let me put it this way,” he said. “Changing the rates was not intended.”
Roach said as much in his statement:
“What we are witnessing with the new system is basically growing pains, but this new system will result in the overall improvement of the collection system and increased revenues to our government. We are asking taxpayers to bear with us as we work through the kinks and rectify their issues one by one. I sincerely apologize for the inconveniences,” Roach said.
Roach defended the new system, however, as a necessary step forward.
“The newly converted billing and collection system is now capturing and utilizing data in accordance with industry standards. The system will include new features that will enhance the ability to perform searches, get comparable sales data, make payments, and perform other related property services,” he said.
Condo owners weren’t alone in the problems. Property owners who previously qualified for and received Homestead Tax credits, may have received tax bills wherein the credit is not shown or applied to the bill amount. Roach’s statement said this error had been corrected in the internal system by the Real Property Tax Division and supplemental bills will be issued indicating the applied credit amount.
Those making amnesty payments may have also received incorrect bills that do not reflect their payments. Property owners who took advantage of the property tax amnesty and made payments during the designated amnesty period will receive supplemental bills showing only amounts currently due, according to Roach’s statement.
During the final two weeks of the amnesty period, the Real Property Tax Division’s online portal was being converted to the new billing and collection system. Bills issued may not reflect amnesty payments. The system is being updated to reflect those payments, the statement said.
Not all the changes in property tax billing are incorrect, however. The new system incorporates data from new assessments that may not have been used in previous billing cycles. And while government offices don’t pay property tax, they do owe for sewer fees, something they may not have been previously billed for.
Mabe sent warnings to realtors across the territory this week. Many of them were already hearing from their condo-owning clients.
“I got a tax bill from a client of mine and they said what the heck?” Mabe said. A home assessed at $500,000 would go from paying $1,885 at .003770 to $3,555 at .007110.
The problem compounds if lenders start figuring new mortgage rates at the higher tax rates or demand monthly payments at the higher tax rate. This is unlikely, Mabe thought, because the rate is set by law.
“So this is just an error and they need time to fix it,” she said.
What she didn’t understand was the delay in reporting the matter to affected taxpayers. “They are no doubt inundated with calls so why they are not dealing with it boggles the mind,” Mabe said. “‘We’re working on it.’ That’s all they had to say.”
The tax bill addresses overpayment, saying it will be applied to the next payment due. But if the amount paid matches the amount owed — even if that amount is incorrect — there are no guarantees. Some of Mabe’s clients have already paid the higher, incorrect amount. She fears they may not get that money back.
Roach’s office said property owners who had not received 2022 tax bills should contact the Office of the Tax Assessor to verify their mailing address using the 4-digit postal code following the zip code for addresses.
