Buying or selling a home involves a lot of things, it also raises questions. In this column ‘Ask Bob’, real estate expert Bob Bartikoski of RE/MAX Real Estate Bonaire answers a real estate question from a reader. This time:
Question: I know that if I buy a house or a lot, I pay 5% transfer tax on the purchase price. If I buy a lot and build, do I pay 5% on the home I build?
Great question, Troy. You won't pay transfer tax on the cost of new construction, but you will pay 8% ABB tax, (which is a general sales tax) that is applied to the labor cost, as well as some goods and services. The amount of ABB varies with the product or service.
When pay an invoice for a service such as gardening or plumbing, it includes a 6% ABB tax, which the service provider pays to the tax office. When we import goods, the retailer usually pays an 8% ABB tax at the time that the product is imported into Bonaire. Builders deliver both goods and services, so the invoices you receive from your builder will have 8% added to the cost of both materials and labor.
There are many variables in ABB tax, so for more detailed information consult the tax office or talk to your builder about costs.
All the best, Bob