PURCHASING GUIDE

14/06/2016

Welcome to the place where summer never ends! Whether you reside here or you are an investor from overseas, buying property on the island is a worthwhile venture which is sure to bring you returns in the future.

Note: There are no restrictions to owning property based on residency or citizenship.

Choose your property

The telecommunications, water works and energy sectors of Barbados are well established. These facilities are reliable and accessible from any parish. All parishes are inhabited, but the most densely populated areas of the country are on the north western, western, south of the island and centrally in the parishes of St Thomas and St George. The highway offers easy access to the major shopping and business hubs in less than half hour. Based on your needs, we search assiduously to help you find what you are looking for.

Note There are small shops, mini marts and gas stations in every parish

Mortgages

If you need to secure a mortgage, you should speak to your financial institution before entering a binding agreement and ensure that you have secured your deposit.

Financing is available for non-nationals as well and there are several financial institutions provide flexible and convenient mortgages to individuals and commercial entities. We can point you towards experienced professionals who can assist you in this regard.

Legal Fees

Purchasers must obtain the services of a registered local attorney to complete the sale transaction on your behalf. The real estate agent may not take funds from you to facilitate a purchase nor may the seller of the property, either one would be illegal. The attorney will search the register and establish the title to the property prior to the completion of sale. He or she will also be present to ensure the proper documentation is passed from the vendor and the property conveyed to you.

The purchaser’s legal fees for property transfer are legislated by government and range between 1% and 2.5% plus 17.5% VAT. Both buyer and seller are responsible for their own attorney fees.

Legal Fees are legislated as follows:

1. Up to $25,000 – $750

2. On the next $75,000 – 2.5%

3. On the next $100,000 – 1.5%

4. On the next $300,000 – 1.25%

5. Thereafter – 1%

VAT of 17.5% is payable on legal fees

Note: The time to complete the purchase of a property varies from property to property but averages between three to six months.

Funds from Overseas

Funds brought into the island from overseas must be registered with the Central Bank. You should instruct your attorney or banker to do so with the Exchange Control Division of the Bank. This ensures that your funds are protected as a foreign investor and facilitates repatriation of these funds should you sell your property in the future.

Deposit

A deposit in the amount of 10% is required on signing the sale agreement. This deposit is a binding contract which the seller’s attorney holds. The balance of the sale price must be paid to the seller’s attorney on completion the purchase.

Property Transfer Tax

Buyers do not have to pay Property Transfer Tax for property with existing buildings. A buyer pays Property Transfer Tax of approximately 10% for land purchases.

Annual Property Tax

An annual Property Tax is charged on the property based on an assessment of the improved value, or if undeveloped, on the site value. These taxes are rated as follows:

Improved Property (House & Land)

• 0% on the first Bds$125,000

• 0.1% on Bds$125,001 to Bds$350,000

• 0.65% on Bds$350,001 to Bds$850,000

• 0.75% on Bds$850,001 and over Unimproved Land

• 0.60% on unimproved value of the land Improved Property (Commercial)

• 0.65% on every parcel of land which is not a residence

About the Author

Leave a Reply