THE EDITOR, Sir:
THE MINISTER of Finance proposed during the last budget presentation, that 15 per cent GCT be collected on maintenance fees paid by strata corporation members.
The government has since agreed to reconsider this proposal, as requested in May by the Association of Strata Organisations. It is hoped that the committee reviewing this matter will soon recommend that the proposal be withdrawn. There are compelling reasons to do so:
1. The Strata Corporations law requires that the cost of maintaining the common area within each strata plan be shared equitably by all strata members. Members are required to contribute on a regular basis to cover such expenses. These fees are usually set after a budgeting exercise and general agreement. This is a co-operative, cost-sharing exercise, rather than a "service" that would attract GCT.
Maintenance expenses include wages for staff to maintain lawn and common areas, lighting, water, insurance, security, repairs to equipment, cleaning and pool supplies, etc. Most of these items attract GCT now, with the exception of wages, water rates and electricity.
2. A person who lives in an apartment within a strata plan should not be required to pay more taxes for the same goods - compared to a person who lives in a single residence or townhouse. Adding GCT tax to strata maintenance fees, after offsetting prior GCT payments paid on supplies and insurance etc, is, in effect, an additional tax on wages and utilities directed only to persons who happen to live in a strata property.
3. The finances of many strata corporations are said to be in poor shape, with some members owing large amounts in unpaid fees. The current strata law needs updating to give elected strata committees the legal means to more effectively collect maintenance dues from all members.
If strata committees are required to collect GCT on maintenance fees owing, this will place many strata corporations in even more peril. Such a requirement would, presumably, hold the elected committee members liable for paying over the GCT, whether paid or unpaid. Most committee members would, undoubtedly, resign and cease their voluntary assistance to their strata, rather than be personally liable for GCT owed by delinquent members.
It is anticipated that the government authorities will agree to withdraw this proposal, after due consideration.
I am, etc.,
D.J. DUFF
Kingston
