The ‘MUST-KNOWS’ about Buying and Selling BVI Property
- March 1st, 2015
- in PROPERTY
Words and photography courtesy of Bonnie Dougall, Principal – Dougall Real Estate BVI
For an introduction to this forum, please see Dec 14/Jan 15 issue of Virgin Islands Property & Yacht or log on to bvipropertyyacht.com, and visit the VI Property Advice section under the Property tab on the homepage. Any queries, please contact [email protected] or the editor directly [email protected]
Summary of owning property in the British Virgin Islands
The British Virgin Islands are an overseas territory of the United Kingdom and as such have close links to the UK and EU as well as a judicial system based on English law that falls under British defense and protection. The country is run by a parliamentary democracy.
The currency is based on the US Dollar. The islands are quite safe with low crime and are not over populated nor over developed. Current resident population as of 2015 is estimated to be around 30,000.
The BVI economy is one of the most prosperous and stable in the Caribbean – the islands have enjoyed an average GDP growth rate of 9.5% from 2004 up to 2007 and has been fairly stable even in aftermath of the last four-year world recession. Estimated GDP was $51,273 (2007 estimate). There is almost no unemployment.
The economy is dominated by two main sectors of financial services and tourism, and both world-class sailing and land based villa/hotel rentals.
Above and beyond the stunning natural beauty, the BVI has highly attractive tax benefits:
- No capital gains tax, no gift tax, no sales tax or value added tax, no profit tax, no Corporation or income tax, and no inheritance tax or estate duty tax
- Payroll Tax varies between 10%-14% of total payroll paid out
The BVI has a strong international business corporate presence. Principal activities include: corporate domicile, trust and estate planning, mutual funds administration and management and captive insurance companies.
The Territory now has one of the highest values for land in the Caribbean and property prices have remained relatively stable in the residential sector, despite the worldwide downturn impacting property prices elsewhere.
What are the advantages and disadvantages of building a new home over buying a resale home?
- Buyers will end up with exactly the configuration, style, and finishings of their dream home and also will likely be in the right area and with the view they desire. It is often difficult to find all of these in an existing home
- Buyers will achieve significant savings in Government Stamp Duty if they build, currently 12% for Non-Belongers and 4% for Belongers. The Stamp Duty will only be charged on the value of the land for a new build, not on the land and house as would be the case in a resale home
- Length of time before occupying a home – For the resale home, once the Non-Belonger License has been approved by the government and BVI Governor, the property can be bought and moved into within a 7-9 month time period for Non-Belongers and about half that time for Belongers, if the banks are involved in financing the home.
Construction of the home will normally take around 1 year, and could take longer if the house is extensive in scope. Construction cannot begin before the new owners have acquired the land, hence the overall time before buyer occupation of a home could be almost two years for Non-Belongers and 1 ½ for Belongers.
- Finding a good reliable builder/architect that buyers have confidence in within a budget while providing a quality product. It is suggested to buyers to get referrals and/or testimonials for any builder/architect they are considering and might also want to get a quote from several builders for the build cost. Most realtors will be able to recommend architects and builders with good reputations along with the banking institutes in the BVI.
Can I buy property in the BVI?
The short and the long answer is ‘Yes.’ There are additional restrictions and requirements that off islanders must meet versus Belonger/Resident buyers, but land, resale homes, and even custom building your own home are possible here.
How long does it take to purchase property in the BVI?
The overall period varies from 6-8 months at the writing of this article. The BVI government controls all land dispositions in the Territory, minimising speculation. Most Non-Belonger licenses are approved, but it takes a bit of paperwork and patience.
How many properties can I buy as an ‘off-islander?’
‘Off-islanders’ are only allowed to own one property each. Transfer to direct family members is easily facilitated with no stamp duty invoked.
Undeveloped land must be built on within 3 years of purchase by ‘off islanders,’ again minimising speculation. The result is that Belongers own about 70% of all land in the BVI (59 square miles) and there is much virgin and green space.