Unregistered landlords face $250,000 fine, three years’ jail

Gail Alexan­der

Se­nior Po­lit­i­cal Re­porter

Gov­ern­ment’s Land­lord Busi­ness Sur­charge will car­ry strong penal­ties for non-com­pli­ance, in­clud­ing for land­lords col­lect­ing rent from premis­es and fail­ing to reg­is­ter those premis­es. Such land­lords will be sub­ject to a $250,000 fine plus three years’ im­pris­on­ment.

Land­lords who know­ing­ly sup­ply false in­for­ma­tion to the Board of In­land Rev­enue will al­so be sub­ject to this penal­ty, Fi­nance Min­is­ter Dave Tan­coo stat­ed in the House of Rep­re­sen­ta­tives on Fri­day.

This was dur­ing de­bate on the Fi­nance Bill 2025, which he pi­lot­ed. The bill im­ple­ments items from the 2026 Bud­get, whose start date is Jan­u­ary 1, 2026. It was passed with amend­ments.

Tan­coo, in de­bate, added, “By de­f­i­n­i­tion, if you are rent­ing a prop­er­ty from some­one and that prop­er­ty is gen­er­at­ing an in­come —that is a com­mer­cial ac­tiv­i­ty, and that’s what this leg­is­la­tion is de­signed to fo­cus on.”

He said the sur­charge en­sures that the land­lord sec­tor is for­malised, trans­par­ent and ac­count­able.

“It helps en­sure that land­lords who ben­e­fit from rental in­come con­tribute ap­pro­pri­ate­ly to na­tion­al de­vel­op­ment, while es­tab­lish­ing a mod­ern com­pli­ance and en­force­ment frame­work that pro­tects ten­ants, sup­ports fair­ness and strength­ens rev­enue ad­min­is­tra­tion.”

“We’re con­fi­dent that this tax is much more eq­ui­table than the PNM’s dread­ed Prop­er­ty Tax be­cause it is cal­cu­lat­ed on ac­tu­al rental re­ceipts as op­posed to the PNM’s fic­tion­al rent.”

The sur­charge re­quires all land­lords to reg­is­ter with the Board of In­land Rev­enue the premis­es they in­tend to rent with­in three months of the com­mence­ment of this sur­charge, and to pay a one-time reg­is­tra­tion fee of $2,500.

Up­on reg­is­tra­tion, the BIR will is­sue a cer­tifi­cate of reg­is­tra­tion for each prop­er­ty, and a pub­lic reg­is­ter will be main­tained for in­spec­tion.

Tan­coo said the sur­charge it­self is to be paid on a quar­ter­ly ba­sis and is cal­cu­lat­ed at a rate of:

– 2.5 per cent of gross rental in­come where quar­ter­ly re­ceipts are $20,000 or less, and

– 3.5 per cent where re­ceipts are above that thresh­old.

Tan­coo added, “This sur­charge ap­plies equal­ly to rental in­come re­ceived in for­eign cur­ren­cy, en­sur­ing uni­form treat­ment across all forms of rental earn­ings.”

Quar­ter­ly fil­ings and pay­ments must be made by the pre­scribed dates.

Tan­coo said penal­ties and in­ter­est ap­ply for late fil­ing or late pay­ment. The BIR will have full en­force­ment pow­ers un­der the In­come Tax Act, in­clud­ing the pow­er to au­dit, re­cov­er and en­force out­stand­ing sur­charge amounts.

Cer­tain prop­er­ties will be ex­empt from the sur­charge: the State, State-con­trolled en­ter­pris­es, ho­tels al­ready sub­ject to the ho­tel ac­com­mo­da­tion tax, and char­i­ta­ble, ed­u­ca­tion­al and re­li­gious in­sti­tu­tions ap­proved un­der the Cor­po­ra­tion Tax Act.

Tan­coo added, “There is noth­ing in this sur­charge sim­i­lar to the PNM’s Prop­er­ty Tax, which was a penal­ty against peo­ple own­ing prop­er­ty as it was based on a fake ze­ro-in­come mod­el. Many who didn’t rent their prop­er­ty com­plained bit­ter­ly of un­fair­ness … the heart­less PNM even threat­ened to take peo­ple to court on that …”

On in­creas­es in penal­ties for dri­ving of­fences, Tan­coo said this is nec­es­sary to com­pel care­less dri­vers to be more re­spon­si­ble, and to pro­tect the en­ti­tle­ment of vic­tims to in­sur­ance com­pen­sa­tion from of­fend­ers. “But the PNM says no …” he not­ed.

He al­so said the law will al­low for a new BIR Board to com­prise six pub­lic of­fi­cers from the In­land Rev­enue Di­vi­sion in­stead of the pre­vi­ous five, and will now in­clude an at­tor­ney with at least ten years’ ex­pe­ri­ence, an ac­coun­tant with at least ten years’ ex­pe­ri­ence, and a Per­ma­nent Sec­re­tary in the Min­istry of Fi­nance as an ex of­fi­cio Com­mis­sion­er.

“The Pres­i­dent will ap­point the pro­fes­sion­al mem­bers and the Per­ma­nent Sec­re­tary, and the Chair­man will con­tin­ue to be se­lect­ed from among the pub­lic of­fi­cers of the In­land Rev­enue Di­vi­sion,” he added.

Tan­coo clashed with Op­po­si­tion MPs on what he called “PNM mis­in­for­ma­tion,” in­clud­ing for­mer Min­is­ter in the Min­istry of Fi­nance Bri­an Man­ning, who told Tan­coo not to call his fa­ther’s (Patrick Man­ning’s) name. Tan­coo ap­pealed to the PNM not to cir­cu­late “fear tac­tics and fear­mon­ger­ing as they seem to be anx­ious to do …”