Things you should know when buying a Property in Barbados
There are specific costs you must take into account:
Annual Costs
Insurance
Property Insurance - US$2.50 to US$3.25 per US$500
Contents Insurance - US$3.00 to US$3.75 per US$500
Land Tax
Site Value - Unimproved Land
Over 4,000 sq. ft. - 0.8%
Under 4,000 sq. ft. - 1.0%
Improved Value - Residential
for the first US$75,000 - 0%
Between US$75,000 to US$225,000 - 0.1%
between US$225,000 to US$425,000 - 0.7%
Over US 425,000 – 1.0%
Please note that the Property tax is capped at a maximum of US$50,000 on residences
Improved Value - All Other Properties - 0.95%
Application for Rebates on property taxes are available for pensioners, agirculural properties and villa properties.
Other Expenses
Utilities - Electricity, Water, Telephone, Cable
Condominium Fees
Pool & Garden maintenance
Property Management Fees
Commission due to rental agent if property being rented:
Short Term – Usually 10%-15% Commission
Long term: 1 year rental – 1 month’s rent
2 consecutive year rental – ½ months rent and third consecutive year – ¼ months rent.
Procedures for Selling a Property in Barbados
- An Offer and Acceptance is executed by both parties
- Appointment of an Attorney to represent you “the seller”.
Attorney’s fees will range between approximately 1% to 2.5% of the sale price of the property plus VAT (17.5%).
- The exchange of the contracts for sale within two to four weeks.
- The vendor makes a deposit of 10% to your attorney-at-law.
- Copy of the deeds to be provided along with proof of payment and recent utility and land tax bills.
- The draft Conveyance is sent to the purchaser’s attorney for perusal and approval.
- The execution of the Conveyance and payment of the 90% balance of the purchase price within approximately 2-6 months.
- The seller is responsible for the payment of the Stamp Duty at the rate of 1% of the sale price.
- The vendors attorney will remit the balance to the seller following the payment fees and commission have been deducted.
- The vendor or his authorized agent is responsible for pointing out the boundary marks of the property to the owner.
Estimated Costs for the Seller:
- Attorney Fees – 1% - 2% plus 17.5% VAT
- Real Estate Agents fees – 4% - 5% plus 17.5% VAT
- Stamp Duty – 1%
- Property Transfer Tax:
- Unimproved property – 2.5%
- Improved property
- First BDS150,000 or US$75,000 is exempt
- Amounts over DS$150,000 or US$75,000 – 2.5% on the excess
- Land Surveyors Fees – BDS$1,500 plus 17.5% VAT
Guidelines on Non-Nationals Buying Property in Barbados
There are no restrictions on the purchase of land or property in Barbados by non-nationals or permanent residents. Non-residents must ensure that all funds for the purchase of real estate are derived from external sources.
All financial arrangements such as mortgage, purchase price and deposit should be in place prior to entering a binding agreement.
Purchasers must obtain the services of a registered local attorney who will conduct a search with the register to establish title to the property prior to the completion of the sale. Attorney Fees range 1.25% to 2% percent of the purchase price and are subject to 17.5% VAT.
Following the conveyance of title, evidence of the recording of the deeds and the certificated plans at the registry of title, the ownership of the property is passed onto the purchaser.
Barbados has a fixed exchange rate (BD$/US$) and foreign buyers are subject to “exchange-control approval”.
The foreign currency, brought to the island to purchase a property, must be registered by an attorney with the Central Bank of Barbados. This protects the purchaser in the event of selling the property at a later date, he/she is permitted to take the funds brought in, plus any profit, out of the island
The seller is responsible for paying 2.5% transfer tax and 1% stamp duty. The seller is also responsible for paying the real estate agent a commission for the marketing and selling of the property.
Finance for the purchase of a property can be applied for and is usually approximately 60% of the purchase price.
Procedures for Purchasing a Property in Barbados
- An Offer and Acceptance is executed by both parties.
- Appointment of an Attorney to represent you “the buyer”.
Attorney’s fees will range between approximately 1% to 2.5% of the sale price of the property plus VAT (17.5%).
- The exchange of the contracts for sale
- The payment of the 10% deposit to the vendor’s attorney-at-law.
- The execution of the Conveyance and payment of the 90% balance of the purchase price within approximately 2-6 months.
- No Stamp Duty is paid by the purchaser. The Seller is responsible for the Stamp Duty at the rate of 1% of the sale price.
- The buyer will be responsible for paying the relevant proportionate amount of Land Tax for the property
- The Sale process in Barbados takes approximately 3 months.
- Property insurance is charged at a rate of approximately 0.4% for residential property.
- Mortgages are available at around 50% to 70% of the property value with a minimum term of 15 years.