Mclaren - Property Abroad

HOW TO BUY PROPERTY ON BARBADOS

There are no restrictions to owning property on the island. Anyone wishing to purchase a holiday or retirement home on Barbados is welcomed, as are overseas investors who may be interested in development projects. As a non-Barbadian, a purchaser must initially get permission from the Central Bank. This is simply a formality.

CENTRAL BANK

All money brought into Barbados must be registered at the Central Bank, which, in turn, guarantees repatriation when the property is sold. The obvious importance of this procedure makes it essential to conduct any transactions through a reputable real estate agent and a local Attorney-at-Law who will deal with all the necessary formalities on your behalf.

PROPERTY TRANSFER TAX

There is no Property Transfer tax payable by the buyer for existing buildings although the Vendor must pay a transfer tax of 10% of the purchase price. Property Transfer Tax of 10% is payable by the buyer for land purchase. Foreign investors should seek professional tax planning advice prior to purchasing property on Barbados in order to minimise or avoid liability to taxes and duties on resale. McLaren International Properties will recommend reputable local financial advisers who are specialists in this area.

STAMP DUTY

The Vendor has to pay 1% Stamp Duty when selling. There is no Stamp Duty liability for purchasers.

MORTGAGES

Financing is available for individuals or corporations who are non-resident under Barbados Exchange Control regulations, subject to being able to prove adequate income stream in dollars or other hard currency to service the mortgage.

LEGAL FEES

Legal fees are usually about 2% to 3%. You may be able to negotiate these percentage rates.

DEPOSIT

Purchasers should be aware that once an agreement has been made, and a 10% deposit of the agreed purchase price has been paid, the sale must proceed. Alternatively, the deposit will be forfeited.

COMPLETION

The period between payment of deposit and completion is likely to be at least 3 months.

ANNUAL PROPERTY TAX

An annual tax is charged on property. The assessment is made on the improved value, or if undeveloped, on the site value. These Government valuations are reviewed every three years. Please see guide below:

Residences:

Up to BdsS$350,000 . 0.2% Bds$350,000 to 850,000 . 0.7% Over Bds$850,000 . 1.0%
Properties other than residences 0.7% Unimproved land 0.8% (Exchange rate guide: Bds$1.98 - US$1)

CURRENCY TRANSACTIONS

Your purchase will involve the transfer of money abroad, most likely in US Dollars because almost all prices for Caribbean houses are quoted in this currency. It is worth considering different routes for the transfer because your bank will not necessarily offer the best rates and service when it comes to large currency transactions.

 

RESIDENCY

If you own a property on Barbados and use it as your main residence and do not rent it out, you can be a tax resident on the island without any qualifying period. Other types of residency would need advice from a Lawyer.