Personal Financial Adviser | Non-contributor seeks NHT loan

QUESTION: I'm in my late thirties, employed, but have never made NHT contributions and I now would like to apply for a loan to buy a house. Can you kindly provide me with a rundown of the requirements?

Bowen

FINANCIAL ADVISER: Only contributors to the National Housing Trust (NHT) qualify for benefits from it. But the fact that you are not contributing now does not mean you have no chance of getting a benefit.

To qualify for an NHT benefit, you must be currently contributing to the Trust; have made at least 52 weekly contributions of which 13 must have been made in the last 26 weeks, just before the date of your application; have paid up with interest any outstanding contributions due in the last three years; be between the ages 18 and 65; and be earning an income which allows you to repay the loan.

Here is how you can put yourself in a position to qualify for a benefit from the NHT. The NHT advises that as one residing and working in Jamaica but not making contributions to the NHT, you can register as a self-employed person.

To do so, you should go to the tax office with your National Insurance Scheme (NIS) card, your Taxpayer Registration Number (TRN) card, valid identification and proof of your income. There, you will be advised of how much you are to pay. All payments are to be made at the tax office or online. Payments are to be made quarterly and you are required to file your tax returns.

As a registered taxpayer, you are required to pay NIS, income tax and education tax in addition to your NHT contributions. Once you have registered, there is no need for you to go to the NHT unless you are applying for a loan. The tax office will send your information to the NHT.

The information I have provided for you is applicable to all self-employed persons who are not contributing to the NHT.

REMITTING CONTRIBUTIONS

On the other hand, in cases in which the employer deducts contributions, but does not remit them to the tax authorities, the affected employees should take their payslips to the NHT whose inspectors will visit the employer. Based on the assessment made by the inspector, arrangements can be made for the employer to remit the money to the authorities so that the employee can access the NHT benefits.

It is very important for money to be remitted to the authorities. With respect to NHT contributions, they form the basis for contributors to get their benefits and to be refunded when that time comes. The NHT advises that, in cases like yours, contributing as a self-employed person commences at the time of your registration as a self-employed person.

NHT BENEFITS

If you register now, you could become eligible for an NHT benefit in another year or so. In addition to being able to borrow to buy a housing unit on the open market or an NHT scheme house, you can also qualify to borrow to build on your own land if you are in a position to do so.

Bear in mind that, if the benefits remain as they are now, when you qualify to borrow from the NHT, you will be able to borrow $4.5 million if your salary can support that level of borrowing. Individual contributors can, however, qualify for $5.5 million to purchase a housing unit in a new development or to construct a new unit. Additional funds can also be sourced from mortgage-lending institutions which have a Joint Financing Mortgage Programme arrangement with the NHT.

To bring your dream of owning your own home closer to you, begin to secure the funds you will need to cover the cost of the transaction. You will need to have, for example, the deposit and money to cover legal fees and other charges such as stamp duty.

- Oran A. Hall, the principal author of 'The Handbook of Personal Financial Planning', offers personal financial planning advice and counsel. Email finviser.jm@gmail.com