When buying in Barbados
Barbados Real Estate: Buying Property in Barbados can be a relatively easy process, especially with the guidance of a knowledgeable Estate Agent to take you through any stumbling blocks that might occur along the way. Below is the process, explained in its simplest form. You can also find more information on Barbados property for sale and the procedures in our 2010 issue of The Red Book :
STANDARD PURCHASE PROCEDURES:
- Verbal Offer and acceptance - in some cases a reservations agreement may apply
- A purchaser should appoint an Attorney-at-Law whose fees are Approx. 1.5% - 2% of property cost plus 15% VAT
- Exchange of contacts for sale and payment of a 10% deposit to the Vendor’s Attorney, within 2 to 4 weeks
- Conveyance and payment of 90% within 3 to 6 months (in most cases). However, with off-plan developments stage payments based on construction progress may apply
MORTGAGES & FINANCE:
US$ Mortgages are readily available to non-nationals, from the offshore sector of the local banking industry under the following broad terms:
- 70% LTV up to US$ 2.5 mil.
- 60% LTV - US$ 2.5 mil. to US$ 5 mil.
- 50% LTV in excess of US$ 5 mil.
- Terms are up to 20 years
- Rate is LIBOR plus 3% (rate is may change due to market forces)
PROPERTY TRANSFER TAX
There is no Capital Gains Tax in Barbados.
The below listed Transfer Tax applies equally to local and foreign vendors.
Purchaser / NO TAX
Vendor / Rate
up to BD$125,000 / Exempt
On amount over BD$125,000 / 2.5%
After completing your purchase transaction; here are the annual costs associated with OWNING a Property in Barbados.
PROPERTY (LAND) TAX
Improved Property - Residential
Value / Rate
Up to BD$125,000 / 0%
On next BD$225,000 / 0.1%
On next BD$500,000 / 0.45%
On amount over BD$850,000 / 0.75%
Property Tax is capped at a maximum of BD$60,000 on owner occupied residences.
Commercial, Industrial, Hotel* and Villa* property.
Improved value / 0.65%
* 50% reduction for Hotels, and 25% reduction for Villas rented to the tourist market; and must be registered with the Barbados
Tourism Authority.
Undeveloped Land - Site value / 0.6%
EXCHANGE CONTROL
Foreign currency brought into the island, as well as funds borrowed by non-nationals should be registered with the Central Bank of Barbados.
Effective April 1st 2007, where the sale of a property by a non-resident is to another non-resident and there is no foreign exchange loss to the country, the proceeds of sale can be repatriated without restrictions. A company incorporated in another jurisdiction and registered as an external company in Barbados is resident in Barbados. Therefore, if the property is owned by a company incorporated in another jurisdiction and registered as an external company in Barbados and that company transfers the property, there will be exchange control restrictions. This change made it unnecessary for complicated overseas ownership structures that were both costly for the vendor and purchaser but
had the net effect of moving the real estate offshore from Barbados.
STANDARD PURCHASE PROCEDURES:
- Verbal Offer and acceptance - in some cases a reservations agreement may apply
- A purchaser should appoint an Attorney-at-Law whose fees are Approx. 1.5% - 2% of property cost plus 15% VAT
- Exchange of contacts for sale and payment of a 10% deposit to the Vendor’s Attorney, within 2 to 4 weeks
- Conveyance and payment of 90% within 3 to 6 months (in most cases). However, with off-plan developments stage payments based on construction progress may apply
MORTGAGES & FINANCE:
US$ Mortgages are readily available to non-nationals, from the offshore sector of the local banking industry under the following broad terms:
- 70% LTV up to US$ 2.5 mil.
- 60% LTV - US$ 2.5 mil. to US$ 5 mil.
- 50% LTV in excess of US$ 5 mil.
- Terms are up to 20 years
- Rate is LIBOR plus 3% (rate is may change due to market forces)
PROPERTY TRANSFER TAX
There is no Capital Gains Tax in Barbados.
The below listed Transfer Tax applies equally to local and foreign vendors.
Purchaser / NO TAX
Vendor / Rate
up to BD$125,000 / Exempt
On amount over BD$125,000 / 2.5%
After completing your purchase transaction; here are the annual costs associated with OWNING a Property in Barbados.
PROPERTY (LAND) TAX
Improved Property - Residential
Value / Rate
Up to BD$125,000 / 0%
On next BD$225,000 / 0.1%
On next BD$500,000 / 0.45%
On amount over BD$850,000 / 0.75%
Property Tax is capped at a maximum of BD$60,000 on owner occupied residences.
Commercial, Industrial, Hotel* and Villa* property.
Improved value / 0.65%
* 50% reduction for Hotels, and 25% reduction for Villas rented to the tourist market; and must be registered with the Barbados
Tourism Authority.
Undeveloped Land - Site value / 0.6%
EXCHANGE CONTROL
Foreign currency brought into the island, as well as funds borrowed by non-nationals should be registered with the Central Bank of Barbados.
Effective April 1st 2007, where the sale of a property by a non-resident is to another non-resident and there is no foreign exchange loss to the country, the proceeds of sale can be repatriated without restrictions. A company incorporated in another jurisdiction and registered as an external company in Barbados is resident in Barbados. Therefore, if the property is owned by a company incorporated in another jurisdiction and registered as an external company in Barbados and that company transfers the property, there will be exchange control restrictions. This change made it unnecessary for complicated overseas ownership structures that were both costly for the vendor and purchaser but
had the net effect of moving the real estate offshore from Barbados.
