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The Caribbean

Your Best Value in the Caribbean

The Caribbean – Buyers guide and purchase costs
The process of foreigners buying property in the Caribbean has been greatly simplified over the last few years, with little or no restrictions on foreign ownership - although the exact process and guidelines can differ from island to island. Established areas such as Barbados have no restrictions on foreign ownership, although foreign investors are required to obtain clearance from the national bank before they can complete a transaction. The legal and technical requirements are very similar to those of the UK and it is estimated that legal fees will cost you in the region of 1.5% to 2% of the purchase price.
The Caribbean is broken down into three main areas: the Bahamas and the Greater and the Lesser Antilles. Historically, islands such as St Lucia, Barbados and the Caymen Islands in the Lesser Antilles have been the most popular destinations to buy property in. Typically these are the territories that were earlier to become established tourist destinations, with the most accessible direct flights from Europe and the US. Because these islands are more established, with higher prices, it means that many buyers are now priced out of these markets. The age old adage still rings true, that you get what you pay for, and as a result property here is still snapped up by those seeking quality. Along with higher prices, these areas tend to have the higher rental returns as well.
Today, an increasing number of islands are emerging as a more affordable alternative to those established markets. Gated developments in the Dominican Republic for example, provide the luxury expected of the Caribbean at a reasonable price. This however tends to be for a reason – crime is common on the island, making a home in a gated community perhaps the only type of property many foreigners would feel comfortable buying.
Antigua has also witnessed somewhat of a property boom thanks to improved flights and the investment around Jolly Harbour on the West Coast. Like many of its counterparts, Antigua offers good golfing and yachting facilities for those after a sporting destination.
Legal issues when buying property in the Caribbean
The legalities of buying property on each island differ enormously, so it is imperative that you seek advice from a local lawyer before committing to any purchase. In some islands, UK solicitors are not even allowed to practice, so this really is a case of seeking local knowledge.
If you are considering buying in Barbados, be aware that any non-resident will have to receive permission from the Central Bank of Barbados before they can proceed with a property purchase. In the British Virgin Islands and Anguilla, it may be necessary to apply for an Alien Landholders Licence. In the Caymans it is possible to purchase residency for a one-off fee. In Tobago, you will only need to acquire a Landholders Licence if you wish to buy more than five acres of land – it’s three acres in Dominica.
The buying process in the Caribbean
The majority of property sales in the Caribbean are currently off-plan developments. Generally, when buying an off-plan property, you will be required to make stage payments. This will usually consist of an initial deposit, and then payments of the remainder of the balance will depend on the development in question. Even though you are purchasing a new-build home, your solicitor will still need to search for the Register of Title, so it is best to use an independent lawyer rather than one recommended by the developer.
If you are buying a resale property, you will need to acquire a solicitor as soon as a price has been agreed – just as you would in the UK. The good news is that generally, throughout the Caribbean, the red tape seems to be far less than we are used to, but the major difference is that you will be required to pay a ten per cent deposit on signing the purchase agreement. This money is then held in the vendor’s lawyer’s escrow account until you pay the balance on completion and it is all transferred to the seller. The buying process for a resale property should take around three months.
Many of the Caribbean islands have different currencies, including the Barbados and Eastern Caribbean dollars, but the majority of property transactions are conducted in the US dollar – even on the islands where it isn’t the official unit of currency.
Some lenders in the Caribbean will now lend up to 70 per cent loan-to-value to foreigners. The length of the mortgage term is also shorter than is available in other areas, at 15 to 20 years – which can make for a rather hefty monthly repayment bill. However, banks tend to be flexible as long as they are sure you will be able to repay the loan.
If your dream is to build your own island bolt-hole, it is also possible to get a mortgage for an undeveloped plot of land. Building in the Caribbean is relatively affordable, thanks to the reasonable cost of labour so, if you have the time and the patience, this could be an economical way to get on the property ladder – just make sure that you have gained planning permission prior to applying for the loan.
Fees and taxes
In a bid to increase tourism, the Dominican Republic government has launched a few tax incentives, such as no stamp duty, no tax on rental income, no capital gains tax for 10 years and no tax on purchases. This brings the island in line with many others which offer favourable tax breaks.
The Turks and Caicos islands, for example, boast no income or capital gains tax – yet stamp duty here is charged at 9.75 per cent of your purchase price. In the British Virgin Islands stamp duty is levied at eight per cent.
Barbados’ taxation system is different again, with a ten per cent transfer tax charged. However, if you buy your home here through an offshore firm then you will be exempt from some tax when you come to sell.
Ultimately, no two islands are the same, so make sure you consult a tax expert before you purchase anything in the Caribbean. As a rule of thumb, you can expect to pay legal fees of around two to three per cent in all islands.

To find out more about mortgages in the Caribbean, and begin your fast-track application, please complete the Enquiry Form. You will receive contact from one of our consultants within 24 hours.


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Caribbean Mortgage

Property in the Caribbean

Buyers guide
and costs

Guide to mortgages
In the Caribbean

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