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 17.5% 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.
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 17.5% VAT).
- Stamp Duty – 1% of the Purchase Price
- Land Surveyor’s fee – Approximately BDS$1,500.00 (plus 17.5%VAT)
- Real Estate Commission – Normally 5% of the Purchase Price (plus 17.5% VAT)
- Early mortgage termination fee – There is normally a fee when a mortgage is terminated before the agreed time period.
For Non Nationals of Barbados
In 1998 the government abolished property transfer tax for non-nationals of Barbados.
It is necessary for a non-national purchaser to remit the purchase price to Barbados in a foreign currency. It is then converted into Barbados currency and registered with the Exchange Control Authority of Barbados. This is to facilitate a subsequent repatriation of funds if the property is sold.
Exchange Control Authority permission is also necessary for the purchase itself. This is usually a formality once the purchase monies have been registered.
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.
Property is passed by conveyance* of title, which is evidenced by the recording of title deeds and certified survey plans at the registry of title.
Once the purchaser has agreed to buy, and the vendor have agreed to sell, a legal contract has to be drawn up by a lawyer in Barbados, which provides for a deposit to be made to secure the property.
The vendor’s attorney holds this deposit in escrow** until completion of the sale when the balance of the purchase price is paid and the title passes to the purchaser by way of the conveyance.
The purchaser will require a registered Barbadian attorney to search the register and establish title to the property prior to the completion of sale to ensure that there are no encumbrances, charges, encroachments or other impediments to the sale.
It will normally take 2-3 months for all the legal issues to be resolved.
*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.