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30/08/06 - Buying Real Estate in the Caribbean |
Keep in mind that each island has different requirements
for its real estate transactions. In the British Virgin Islands and Anguilla, non-residents are required to apply to
the Government of the British Islands for a Non-Belongers License (sometimes called an "alien landholder's license")
before they can purchase property. This includes a background check so be prepared to supply two character
references from an employer and a public official such as a notary public, a financial reference, and a police
certificate stating that you are of good standing. Along with these materials, you must submit at least four
successive newspaper advertisements that give the property description and property price of the real estate you
wish to purchase. There is a $50 fee for each person or company named on the application as well as a fee of $150
per person or company named in the license. All properties are purchased through an agency, and the buyer pays a 10%
earnest deposit to the agent as an indication of the intent to purchase the property.
The sales agreement includes a condition that the sale is contingent on approval of the Non-Belongers license. After
you receive Non-Belongers license it should take 30 days for the sale to go through. However, obtaining the Non-Belongers
license can take from 12 to 18 months. If you choose to buy property in the BVI and need financing, you must obtain
your mortgage from a BVI financial institution.
On Barbados, The Central Bank of Barbados must grant permission to any non-Barbados resident who wishes to buy
property on the island. An off-shore bank can approve a mortgage for a property on Barbados, and it is best to have
your financing secured before you enter into a binding agreement. The buyer must employ a licensed Barbados attorney
to search the register of title to establish title to the property before the sale takes place. The buyer and seller
sign a binding contract, and the seller's agent holds the 10% deposit until the sale is completed. When the
transaction is complete, the balance of the purchase price is paid and the buyer takes title to the property.
Most non-Barbados residents purchase the property through a company that is must be registered to do business in
Barbados, but can be incorporated outside Barbados. The seller pays the stamp tax and transfer tax. The buyer must
pay his own legal fees, which range from 1.5% to 2%. The annual land tax ranges from 0.2% for properties under
$350,000; to 0.7% for properties between $350,000 to $700,000, and 1% for properties over $850,000. Property owners
who plan to rent their proporty must apply 7.5%VAT tax to the rent they collect.
US citizens buying property in US territories such as Puerto Rico or the USVI find that the real estate process is
basically the same as in the continental US. A new incentive for business development has been a boon for the USVI
real estate market. US companies with Industrial Development Corporation benefits can shelter up to 90% of corporate
income tax for 10 years if the principals live in USVI. This has resulted in a demand for four- and five-bedroom
luxury homes. |
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