Tips and Tools

Buying Property in Barbados

No Restriction.
In Barbados there is no restriction on the purchase of property by non citizens or permanent residents, but non-residents must ensure that all funds for the purchase of real estate are available from external sources.  These funds must be registered with the Central Bank of Barbados and the permission of the Exchange Control Authority must be obtained for the sale or purchase of property  by a non-resident, whether such non-resident is a Barbadian citizen or not.

Conveyance of title
Property must pass conveyance of title, evidenced by the recording of the deeds and certified survey plans at the registry of title.  A registered Barbadian attorney will be required to search the register and establish title to the property prior to the completion of sale.  The parties sign a binding contract and the vendor’s attorney holds the deposit until completion, at which time the balance of the purchase price is paid.  Once an agreement has been signed and a 10% deposit of the agreed sale price has been paid, then the deal must proceed or the deposit is forfeited.

The title may be taken in a person’s name or through a corporate vehicle set up to own the property.  It is possible for non-residents to purchase property through a company, that may be incorporated outside Barbados but which must be registered in Barbados.  The sale of property by all persons, including citizens or permanent residents, is subject to property transfer tax of 2.5%, plus approximately 1% stamp duty.  However, the first $125,000 of the sale proceeds is exempt from property transfer tax provided that there is a building on the property. 

Attorney’s fees for both the seller and the purchaser are approximately 1.5% to 2% of the sale price.  The real estate agent’s commission fees are normally 5% of the sale.  Both fees are subject to 15% VAT.

US Dollar loans are available to non-residents from FirstCaribbean International Bank for up to 60% of the value of the property over a term of up to 15 years.

 

Land Tax.  Any owner of land in Barbados is required to pay an annual land tax at the following rates:

RESIDENTIAL (Developed Land)

First BDS$150,000 = 0%

BDS$150,000 - $400,000 = 0.10%

BDS$400,000 – 1m = 0.45%

BDS$1m >  =  0.75%

VACANT  LAND

0.60%

COMMERCIAL LAND

0.65%

 

Following enactment of new legislation, there is a BDS$60,000 cap on land tax rates, provided that the house is used exclusively as a residence by the person who owns the land upon which the house is erected.

All money brought into Barbados should be registered at the Central Bank, which facilitates repatriation if the property is sold.  The importance of this procedure makes it essential to conduct transactions through a reputable real estate agent and a local attorney-at-law.

*Conveyance: A written document, which transfers property from one person to another.
**Escrow: The money is held in the attorney's bank account until the completion of the sale.

If you are Selling a Property
Property Transfer Tax for land only - 2.5% of the Purchase Price.
Property Transfer Tax for house and land - first $125,000 exempt, 2.5% on the excess.
Legal fees - Approximately 1.5 to 2% of the Purchase Price (plus 15% VAT).
Stamp Duty - 1% of the Purchase Price
Land Surveyor's fee - Approximately BDS$1,500.00 (plus 15%VAT)
Real Estate Commission - Normally 5% of the Purchase Price (plus 15% VAT)
Early mortgage termination fee - There is normally a fee when a mortgage is terminated before the agreed time period.

If you are Buying a Property
There is no Property Transfer Tax for buyers.
Buyers Legal Fees - Approximately 1.5% of the Purchase Price (plus 15% VAT).
Mortgage Down Payment - Usually a minimum of 10%, but can be as low as 0%.
Mortgage Repayment Time - Up to 30 Years or until the borrower reaches 65 years of age.
Mortgage Interest Rate - Range from 6% to 9%
Mortgage commitment fee and negotiation fee - Ranges from 0.5% to 3%.
Life Insurance - This is usually required if you need a mortgage.
Annual Land Tax
- On the initial $150,000            - 0%
- On the next $250,000            - 0.10%
- On the next $600,000            - 0.45%
- On the excess of $1,000,000   - 0.75%

For additional information please click on the following link:

 www.barbados.gov.bb/Landtax/Rates.html

Annual Property Insurance
0.4% for a residence
s0.6% for commercial buildings
0.9% for hotels