Buying property, a home or a business in Barbados is not difficult, as there is no differentiation made between nationals and non-nationals. However, as a formality, non-nationals must first get permission from the Central Bank of Barbados for the purchase of a property.
Barbados Property Transfer Tax
There is no Property Transfer Tax for anyone buying an existing building, but there is a Property Transfer Tax of approximately 10% of the value of the purchase for anyone buying land.
When selling a property in Barbados, the vendor will normally incur the fees charged by the real estate agent, property transfer tax of 7.5%, stamp duty of 1% and legal fees of approximately 2%.
It is advisable to employ the services of an registered Barbadian attorney-at-law. The buyers legal fees for property transfer in Barbados are regulated by government and are set between 2% to 3% of the purchase price, plus 15% Value Added Tax added to these fees.
Barbados Property Title
Property in Barbados is transferred by conveyance of title, with the Public Registry maintaining a record of ownership. The title may be registered in your own name, or more commonly in the name of a company set up specifically to own the property. If the title is to held by a company, the company may be incorporated outside Barbados, but must be registered to do business in Barbados. The use of a company for property ownership makes the future sale of the property very simple. Please note that Caribbean Land and Property offer services for the formation of offshore companies in the BVI, Anguilla, Nevis or Panama. Click here for Offshore Company Formation Information
A property purchase in Barbados usually requires a deposit of 10% to be paid to the vendors attorney and held in an escrow account, to secure the property. The balance of the purchase is usually paid within 90 days, upon which the title is conveyed to the purchaser. During the time between payment of the deposit and completion of the sale, the buyers legal representative will perform a search on the title to ensure that there are no legal encumbrances, charges, encroachments, or other impediments.
Mortgages in Barbados
Financing is available in Barbados for non-nationals and is provided by several local banks. Non nationals can obtain US dollar loans for up to 60% of the property value, over a term of up to 15 years, with Barbadian nationals often being able to obtain longer repayment terms of up to 20 to 25 years. Barbados interest rates are higher than most European and North American countries and therefore the cheapest option for most non-nationals is to find a second mortgage on their existing property. Caribbean Land and Property offer mortgages in Barbados. Click here for further information
Barbados Fund Registration
Funds brought into Barbados from overseas should be registered with the Central Bank as a formality, with the registration often being made by the buyers attorney or banker as part of their services. Registration ensures that your funds are protected as a foreign investor and allows the repatriation of these funds should you choose to sell at some point in the future.
An approximate exchange rate for Barbados Dollars, as of November 2008 is as follows:
* US $1 = Bds $2.00;
* GBP £1 = Bds $3.00
Please note that Caribbean Land & Property offer services for the transfer of funds at preferential exchange rates, saving buyers significantly on their property purchase costs. Contact us for details
Barbados Property Tax
Property Tax is charged annually by the government on each property, based on an assessment of the improved value, or if undeveloped, on the site value. These valuations are reviewed every 3 years and taxes rated as follows:
0% on the first US$62,500
0.1% on US$62,501 to US$175,000
0.65% on US$175,001 to US$425,000
0.75% on values in excess of US$425,000
0.65% of property value
0.90% for hotels
0.60% on unimproved value of the land
Barbados Income Properties
Barbados has an active rental market for both long-term and vacation rentals. The returns that can be made from these properties can vary widely depending upon the property purchased, however in general investors should anticipate returns in between 5% to 12% on income, whilst also enjoying capital appreciation.
Property owners wishing to rent their property for short-term rentals, must register for VAT and add 7.5% value added tax to the rental charged. Registration for VAT has the advantage of allowing the property owner to reclaim VAT paid by the owner in the maintenance and upkeep of the property. Profits derived from rental activities are subject to Barbados income tax.
Barbados Property Management
There are many local managing agents in Barbados that offer services to handle the day-to-day running and maintenance of properties and ensure that the property is run smoothly and is ready to receive guests or owners.
Condo and Apartment Maintenance Fees
The typical maintenance fees charged, range from US$200 to US$750 per month and vary from development to development.
Town and Country Planning
When purchasing land, the vendor is required to provide the buyer with a Certificate of Compliance from the Barbados Town and Country Planning Office, certifying that the roads and services have been constructed in accordance with planning guidelines.
Planning permission is required for the construction of a new property or the improvement of an existing property, with the process usually taking between 2 and 6 months from application to notification. The planning department will judge any application for its compliance to a set of guidelines governing such things as the distance between adjoining properties and other physical objects, building density, height, method of effluent and rainwater disposal and the zoning of the land.
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Our local representative for all Barbados Property can be contacted by emailing us through our Contact us page