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Urban Renewal (Tax Relief) Act


Published: 1995-04-25

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URBAN RENEWAL (TAX RELIEF)

THE URBAN RENEWAL (TAX RELIEF)
ACT

ARRANGEMENT OF SECTIONS

1. Short title.

2. Interpretation.

3. Declaration of special development area.

4. Declaration of approved developer.

5. -Revocation of approval.

6. Requirement for planning permission unaffected.

Urban Renewal 3onds

7. Declaration of approved organiration.

8. Publication of approval.

9. Terms and conditions of bonds.

10. Application of sums raised by issue of bonds.

+ - Income Tax Relief

1 1. Interest on bonds exempt from income tax.

12. Exemption fiom income tax re loans to developer.

13. Tax credit to developer.

14. Rebef from tax re rental income.

14A. .Relief re rental expense.

14B. Exclusion of relief granted under other enactment.

15. Election for relief for national monument.

Exemptionfiom Transfer Tax, Stamp Duty and Fees

16. Exemption from transfer tax and stamp duty on issue and transfer.

17. Exemption from transfer tax on transfer of improved property.

: 17A. Exemption from transfer tax and stamp duty on acquisition of land.

18. Regulations.

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URBAN RENEWAL (TAX RELIEF')

THE URBAN RENEWAL (TAX RELIEF) ACT ~ e t s
14 of 1995,
31 of 2010.

[25th April, 1995.1

1. This Act may be cited as the Urban Renewal (Tax Short title.
Relief) Act.

2. In this Act- Interpreta- tion.
"approved developer" means any person approved by the

Minister by order to carry out any improvement
works in a special development area;

"approved organization" means any organization declared
as such by the Minister for the purpose of the issue or
underwriting by that organization of urban renewal
bonds;

"capital expenditure." means expenditure directly incurred
in the carrying out of improvement'works in a special
development area;

"Commissioner" means the Commissioner of Taxpayer, 31/201o
Audit and Assessment; S. 2.

"improved property" means property in a special develop-
ment area, being property on which improvement
works have been carried out;

"improvement works" means the construction or improve-
ment of a building or structure in a special develop-
ment area or the purchase of a building or structure in a
special development area for the purpose of improving
such building or structure;

"incentive period" means a period of not less than ten years
which the Minister may determine by order, commen-
cing on the date specified in that order;

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4 URBAN RENEWAL (TAX RELIEF)
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1 "investor" means any person who, by means of loans, the
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I purchase ' of urban renewal bonds or otherwise,

I provides funding for the carrying out of improvement
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I

works in a special development area;
1

I "special development area" means an area which is
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I declared by the Minister responsible for urban develop-
) ment by order to be a special development area for the
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1

purposes of urban renewal; . .
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I "urban renewal bonds" means bonds issued by an approved

a
I organization for the sole purpose of providing funds
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I for the carrying out of improvement works in a special
I , development area.
t
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I ~eclaration 3 . 4 1 ) The Minister may, by order, declare any area suffer-
I ofspecial develop- ing fiom blight or urban decay to be a special development area , ment area. for the purposes of this Act: '

1
I (2) An order made under subsection (1) shall contain a
I
I description of the area to which it applies.
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I Declaration 4 . 4 1 ) The Minister may, by order, declare a person who
I of approved
I developer. proposes to carry out improvement works in a special develop-
I ment area to be an approved developer for the purposes of this
I Act.
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I

I (2) An application for such approval may be made in
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such form and manner as may be prescribed.

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I (3) The Minister may, in his discretion-
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I (a) approve an application under this section, subject to
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I such terms and conditions as he thinks fit; or
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I (b) refuse such application.

a
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I Revocation 5 . 4 1 ) If the Minister is satisfied that an approved
1 of approval. developer has failed to comply with any term or condition
I subject to which the approval of the developer has been

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URBAN RENEWAL (TAX RELIEF) 5

made, then, subject to subsection (2), the Minister may by order,
published in the Gazette revoke an order made under section 4
with effect from such date as he may determine.

(2) Before revoking an order pursuant to subsection (I),
the Minister shall give the approved developer an opportunity to
explain the circumstances of his failure to comply with the term
or condition.

(3) The revocation of an order pursuant to subsection (1)
shall not affect any entitlement to income tax relief under this
Act which may have accrued in relation to the approved deve-
loper prior to the revocation.

6. For the avoidance of doubt, it is hereby declared that the Require-
ment for approval of a person as an approved developer under section 4

does not dispense with the necessity for that person to obtain permission
such permission to develop or subdivide land as may be required unaffected.

under the Town and Country Planning Act, the Natural Re-
sources Conservation Authority Act or the Local Improvements
Act.

Urban Renewal Bonds

7.-(1) An organization, which intends to issue or underwrite Declaration
urban renewal bonds shall apply in writing to the Minister to be :'gzrd
declared an approved organization. tion.

(2) An Application under subsection (1) shall state-

(a) the sum of money which the applicant intends to raise
by the issue of urban renewal bonds;

(b) the rate of interest payable in respect of such bonds;

(c) the terms and conditions under which the bonds are to
be issued;

(d) a general description of the improvement works to
which the sum raised by the bonds is to be applied.

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URBAN RENEWAL (TAX RELIEF)

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I (3) The Minister may require an applicant to M s h him
I with- such-dditiolial information as he i n a y ~ p e c i ~
I

(4) The Minister may, in his discretion-

(a) approve an application under this section, subject to
such terms and conditions as he thinks fit; or

(b) refuse such application.

; Publication of
I approval.
i

I Terms and
conditions of

I bonds.

8. Where the Minister approves an application made under
section 7, notice of such approval shall be published in the
Gazette and shall contain the matters referred to in subsection
(2) of that section.

9. Each series of urban renewal bonds shall bear such rate of *
interest and shall be subjected to such terms and conditions as
the Minister may approve before the issue thereof.

I Applicationof 10. The sum of money raised by the issue of each series of sums raised by b
1 issue o f bonds. onds under this Act shall be applied for the purposes approved
I for that series by the Minister pursuant to section 7.

I ; Income Tax Relief

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\ Interest on 11. Any interest payable or other sum accruing in respect of
j bonds exempt
, fiom income an urban renewal bond to the investor shall, in the hands of the
' tax.
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investor or in the hands of the person entitled to receive it on his

1 +
behalf, be exempt fi6m income tax.

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1 Exemption 12. Where an approved organization makes a loan to an

1 frominwme
I tax re loans to approved developer of any sums of money raised by the issue or

1 .
developer. undeMliting of a series of bonds under this Act, for the purpose

I of financing the carrying out by that developer of any improve-

! ment works with respect to which those bonds were issued, then

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URBAN RENEWAL (TAX RELIEF)

the amount of interest payments received by the approved
organization in respect of that loan shall, in the hands of the
approved organization, be exempt from income tax.

13.--(1) Where in any year of assessment during the incen- Taxcredit
tive period, an approved developer carries out improvement developer.
works in a special development area, there shall, subject to sub-
section (2), be allowed a tax credit equivalent to thirty three and 3112010
one-third per cent or such other rate as the Minister may by S. 3. • order prescribe, of the capital expenditure made by him during
that year of assessment in respect of the improvement works.

(2) The tax credit allowed to an approved developer
pursuant t o subsection (1) is subject to the following con-
ditions-

(a) the amount of the tax credit may be applied to reduce
the income tax liability of the developer for the year
of assessment referred to in that subsection but not more
than fifty per cent of that liability may be so reduced;

Cn x (b) any amount of tax credit not utilized under paragraph
2 (4-

(i) may be carried forward and applied in a sub-
sequent year of assessment so, however, that not
more than fifty per cent of the tax liability may

1 be so reduced in any such subsequent year of
assessment;

(ii) shall not be refundable or be allowable as a
credit against any unpaid income tax in respect
of any year of hssessment prior to the year to
which subsection (1) applies.

(3) An approved developer shall keep separate books of

a 'account relating to improvement works carried out by him in a special development area.
14. An approved developer shall, in respect of income Relieffrom

tax re rental obtained from the lease or other letting of any improved ~ncome. .
property in a special development area, be entitled in each
year during the incentive period to relief from income tax.

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! 8 URBAN RENEWAL (TAX RELIEF)
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1 Reliefrerental 14A. - (1 ) The lessee of improved property owned by an
expense.

1 3 1 ~ 0 1 0 approved developer shall be entitled to claim as a deduction
1 s. 4. from gross income in arriving at the statutory income of the
I lessee for any year of assessment, an amount equivalent to two

1 hundred per cent of the rent paid by the lessee in respect of the
property.

(2 ) The provisions of subsection ( 1 ) shall not apply-

1 Exclusion of
, relief granted
I under other
[ enactment.

31/2010.
! S. 4.
I

(a) where the lessee of the property is a connected person
to the approved developer; or

(b) in relation to so much of the rent paid by the lessee as
appears to the Commissioner to be higher than a

- reasonable commercial rate on the date on which pay-
ment is due.

( 3 ) In subsection (2) "connected person" shall be con-
strued in accordance with section 2 of the Income Tax Act.

1 4 B . - ( 1 ) Subject to subsection (2), no relief shall be
allowed under this Act in respect of the portion of a person's
statutory income for any year of assessment in relation to
which relief from income tax is given by virtue of any other
enactment.

(2 ) Subsection ( 1 ) does not apply in respect of the in-
come of-

(a) an insurance company that is taxed in accordance with
section 48(4) of the Income Tax Act;

(b) a building society that is taxed in accordance with sec-
tion 30(2) of the Income Tax Act;,

( c ) an approved enterprise that is entitled to relief in accor-
dance with section 1 1 or 12 of the Industrial Incentives
Act;

(6) a company that is entitled to relief in accordance with
section 12 of the Industrial Incentives (Factory Con-
struction) Act;

(e ) a company that is entitled to relief in accordance with
section 9 of the Hotels (Incentives) Act; or

u> a company that i s entitled to relief in accordance with
section 7 of the Resort Cottages (Incentives) Act.

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URBAN RENEWAL (TAX RELIEF) 9

(3) In this section "relief' means a statutory benefit
whereby the whole or any portion of the statutory income of a
body corporate is relieved of tax or is taxed at a lower rate
than specified in section 30(l)(b) of the Income Tax Act.

15.-(1) This section applies to capital expenditure incurred Election for
relief for by an approved developer in respect of improvement works n,ional

which comprise a national monument, which expenditure monument.

a would, but for subsection (2), also be eligible for income tax relief under the Jamaica National Heritage Trust Act.
(2) Capital expenditure to which this section applies

shall not be available for relief both under this Act and the
Jamaica National Heritage Trust Act, and notwithstanding any-
thing to the contrary, the approved developer may elect under
which of the aforesaid enactments he will claim relief.

(3) An election under this section shall be by notice
in writing to the Commissioner of Taxpayer Audit and Assess- L.N.
ment at any time not later than the 15th day of March in the year 16511999.
next following the year of assessment to which the election
relates.

(4) In this section "national monument" has the same
meaning as under the Jamaican National Heritage Trust Act.

~ x e m ~ t i o n f i - o h Transfer ax, Stamp Duty and Fees
16.-(1) Urban renewal bonds shall be exempt from stamp Exemption

duty. from trans- fer tax,
stamp duty (2) Any instrument necessary for the transfer of title to and fees on

an urban renewal bond, upon which or in respect of which issueand
transfer of stamp duties, transfer tax, registration or recording fees are pay- bond.

able, shall be exempt from the payment of such stamp duties,
transfer tax, registration or recording fees.

a (3) In this section and section 17 "transfer" has the same'
meaning as under the Transfer Tax Act.

17. During the incentive period every transfer of title to any Exemption
from trans- improved property by an approved developer shall be exempt fer tax on

from taxation under the Transfer Tax Act. transfer of
improved
property.

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1 Exemption
1 from 1 transfer tax

and stamp 1 duty on
acquisition

1 of land.
1 3112010
i S. 5.

URBAN RENEWAL (TAX RELIEF')

17A.-41) Subject to subsection (3), during the incentive
period, no transfer tax and stamp duty shall be payable on the
transfer of any land in a special development area, where the
condition specified in subsection (2) is satisfied.

(2) The condition is, that the parties to the agreement
for .the transfer of the land have demonstrated to the Commis-
sioner that the purpose of the transfer is to facilitate the carrying
out of improvement works on the land, before the expiration of a
period of three years after the date of transfer, or such longer
period as the Minister may, by order, specify.

(3) Where the improvement works are not carried out
before the expiration of the period specified in subsection (2),
then the transferee, or such'other person who is the registered
proprietor of the land at the expiration of the period, shall be
liable to pay to the Commissioner an amount equivalent to the
transfer tax and stamp duty hat , but for subsection (I), would
have been payable.

(4) In subsection (1) "land" has the same meaning as
in the Transfer Tax Act. , .a

18. The Minister may make regulations generally for giving
effect to the provisions of this Act and, without prejudice to the
generality of the foregoing, such regulations may-

(a) contain provisions for the processing of
applications for.approva1 kde r this Act;

(b) prescribe the form and manner in which
applications for approval under section 4 are
to be made.

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