Jamaican real estate professionals foresee that the recent adjustment in stamp-duty charges for the transfer of mortgages that are being refinanced will make it easier for mortgage holders to shift their loans between institutions. The tax was adjusted as at May 16 from three per cent of transaction value to a nominal J$100 charge for the transfer of mortgages that are being refinanced. Stamp duty was last reduced on January 1, 2010, when duty payable on property transactions was cut to three per cent, down from 4.5 per cent.
Where there is refinancing of a mortgage for equal amounts or less, stamp duty will be payable at the nominal rate of J$100, but where there is an increase in the value of the mortgage, the applicable stamp duty rate will be payable on the difference. As a result, industry stakeholders are expecting to see a more energetic take-up of real estate and moves to refinance loans resulting from this adjustment. It is also predicted that mortgage rates will fall as competition amongst lenders increases in response to market demand for lower cost mortgages.