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Government hopes to gain $20 million this year

By Mar-Vic Cagurangan HAGÅTÑA, Guam (Marianas Business Journal, Nov. 8, 2010) – The government of Guam stands to recover an estimated US$20 million in lost real estate taxes and raise more revenues in the future once the tax map is completed by the end of the year.

Department of Revenue and Taxation Director Art Ilagan said the tax map will allow his agency to determine if the current property assessment roll matches the actual value of the real estate.

The tax mapping is being conducted by Parsons Brinkerhoff, which has been contracted by DRT using US$900,000 of its US$1 million share of proceeds from the US$117 million bond sold by the government of Guam last year.

The last time Guam had real property appraisal was in 1995 and several residential properties have since been rezoned to commercial designation, Ilagan said.

"If a residential property is converted to commercial, the owner should be paying higher taxes," Ilagan said. "PB did a preliminary survey, and they found that the government is losing US$1.3 million a year because we don’t have information about building and zone changes, so several properties are not properly assessed."

Currently, Ilagan said, DRT does not receive information from the Department of Land Management and Guam Land Use Commission regarding land rezoning.

Ilagan said once the tax map is available, DRT will be able to track properties that have been rezoned for profitable use. Subsequently, property owners will be assessed based on the actual value of their properties from the time they were converted for commercial use, he added.

The tax map is a component of the department’s Guam Property Assessment System, a project funded through the American Recovery and Reinvestment Act, which will create a database for all land transactions, including sales, purchases and liquidations.

"Right now, we don’t have data that allow us to appraise properties," Ilagan said. "This is what we do to raise revenues. Instead of raising taxes, we go after the ones that are not collected."

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