Vendor signs listing agreement with agent to market the Grenada property
When agent finds purchaser and offer is accepted by vendor, agent writes letter to purchaser advising that the offer has been accepted. (A written offer and acceptance often though a real estate agent)
This letter is copied to the vendor’s lawyer and purchaser’s lawyer.
The vendor’s lawyer uses this letter to prepare a sale agreement. The sale agreement is sent to the purchaser’s attorney for perusal and once approved; it is forwarded to the purchaser for signature and 10% deposit.
The deposit is retained by the vendor’s attorney.
A title search and requisition is then carried out by the purchaser’s attorney-at-law.
The deed of transfer or conveyance is then prepared and executed upon satisfactory completion of any matters pertaining to good title.
The purchaser then makes final payment, which is sent to the vendor’s lawyer.
This process can take 1 to 4 months, depending on whether or not an alien landholding licence is required.
In conclusion of the sale, the vendor’s lawyer makes certain required payments on the client’s behalf, including paying the 5 /15% property transfer tax, agent’s commission and other deductions.
The new deed is registered in the registry and the vendor/purchaser receives all final paperwork thereafter.
The bank requires a declaration of the source of funds from the purchaser. If foreign currency is needed in excess of EC$250,000, approval is necessary from the Ministry of Finance (Form E).
Grenada property ownership requirements
All non-nationals, foreign companies or trusts are required to get approval from the Government of Grenada prior to purchasing property or land. The Alien Landholding Licence is approved by the Prime Minister’s Office.
Alien Landholding Licence Fee: 10% for non-residents (only)
Grenada Property Transfer tax at the time of sale: 15% for non-residents
Application forms are available from the Prime Minister’s Ministry or from the purchaser’s lawyer. There is no additional government charge for this application.
VAT has arrived in Grenada, it was implemented on the 1st February 2010 and we would like to explain simply how it will affect purchasers and vendors.
As a purchaser it is mandatory that you pay 15% VAT on lawyer fees.
eg. If the property costs $100,000.00 the lawyer fees will be 2% + 15% VAT = $2,000 (2%) + $300 (15% VAT on fees) making a total to be paid in lawyer fees of $2,300.00.
The 1% Stamp Duty plus 10% Alien Land Holding Licence remains applicable.
The 5% Land Transfer Tax remains the same.
Lawyer fees will incur 15% VAT as will Agent’s Commission.
eg. If the property are $100,000 the lawyer fees will be $2,000 (2%) + $300.00 (15% VAT on fees) plus Agent’s Commission of $5,000 (5%) + $750.00 (15% VAT on commission) = $8,050.00 total lawyer fees and agent’s commission.
Balance in hand for the Vendor at the end of the Transaction = $91,950.00
We hope this clarifies the new Grenada property tax and look forward to doing business with you in the future. If you have any questions on Grenada VAT or the Grenada Property For Sale process please contact our professional team.
The expenses incurred by a purchaser will be as follows:
|Alien Landholding Licence Fee:||10% for non-residents (only)|
|Legal Fees:||2% of the purchase price, approximately|
|Stamp Duty:||approximately 1% of the purchase price|
|Land surveyor’s fee:||usually 0.5% of the value of the land|
|Out-of-pocket expenses:||approximately US$500|
|VAT:||15% on Legal Fees & Agent’s Commiss|
The expenses incurred by a vendor will be as follows:
|Property Transfer tax:||5% of the market value for nationals and members of the OECS|
|15% of the market value for non-nationals|
(The government of Grenada allows an exemption of the first EC$20,000 on property.)
|Legal Fees:||approximately 2% of the purchase price + 15% VAT|
|Real estate commission:||normally 5% of the purchase price + 15% VAT|
|Out-of-pocket expenses:||approximately EC$500|