There is no uniform buying process throughout the Caribbean so it will be paramount that you check the property laws relating to the specific country in which you wish to buy a property. There are, however, a number of places in the Caribbean whose property laws follow similar procedures having evolved from English land law. Other countries’ buying laws share characteristics with those of France and the Netherlands. So whilst general traits can be identified in the real estate buying process, there remain marked anomalies in the laws of some Caribbean countries that are worth identifying. Many countries within the Caribbean require that real estate agency practices are regulated although some of the poorer, less well-developed countries do not and these real estate markets can be prone to massive corruption.
Whilst many of the countries within the Caribbean are highly receptive to foreign direct investment and property ownership there remains a minority who refuse outright to allow foreign freehold ownership of immovable property such as Cuba. Many countries such as Jamaica though are seeking to encourage foreign direct investment and have policies in place to allow foreign owners the same legal rights as domestic citizens where property assets are concerned.
When buying within the Caribbean you will generally be required to makes payments in stages beginning with an initial 10% deposit upon signing a purchase agreement. Given that no two islands’ property laws will be exactly the same, it is crucial that you consult an independent local solicitor (on some islands foreign solicitors aren’t even allowed to practice) who will be familiar with the island where you are buying property. Many islands will require that a lawyer searches for the Register of Title although there is generally less bureaucracy to contend with in the Caribbean making the property buying process comparatively swift compared with elsewhere in the world.
When it comes to fees and taxes there are variations from island to island and it may be advisable to consult a tax expert from your chosen location. The good news is that a number of governments in the Caribbean have introduced tax incentives to encourage foreign property buyers. The Dominican Republic, for example, now has no tax on rental income, no stamp duty, no capital gains tax for ten years, and no tax on purchases. The Turks and Caicos islands boast no income or capital gains tax – yet stamp duty here is charged at 9.75% of your purchase price. The British Virgin Islands charge a similar stamp duty of 8%. Barbados’ taxation system is different again, with a 10% transfer tax charged. If you buy your home here through an offshore firm however, then you will be exempt from some tax when you come to sell.
Consisting of around 7,000 islands organised into 28 different territories, the Caribbean has a number of political systems operating within it although they are largely democracies with various party systems. Two party systems are very often found in Anglophone countries such as Jamaica and Barbados and very much mirror the British system. Haiti, on the other hand, is a classic example of a multi-party system where seats are awarded in legislature according to how many votes are received. In contrast to the Caribbean’s two-party systems, this allows a number of smaller parties to gain seats and Haiti has around 28 parties vying for seats. Examples of one-party systems may be found within the islands too, perhaps best demonstrated by Cuba. Although a self-proclaimed form of socialist democracy, in practice, Cuba is controlled by the Communist Party of Cuba which refuses to recognise other parties. This is very much an exception however, within the more common democratic framework of the Caribbean. Many of the property laws in these countries are now very much geared towards accommodating foreign investment with particularly lenient property tax laws designed to encourage foreign buyers.
Given the number of islands within the Caribbean it would be prudent to become familiar with the exchange rate between your domestic currency and that of the island where you wish to purchase property. Many countries within the Caribbean have ‘dollar linked’ there currencies giving you less to worry about in this regard. Those that don’t follow this practice will still tend to price their real estate in US dollars making it easier for foreign investors to gauge what the market is like but it is obviously advisable to conduct some careful research into the exchange rate within these countries to ensure that currency conversions and foreign exchange transactions don’t impact negatively on your investment.
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