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Guide to Buying Property

It can be extremely comforting to understand the process of property purchase when taking this exciting journey.

     Without delay, here is the Harneys’ guide to buying a property in the BVI.


Letter of intent

The first stage of most property transactions is the buyer and the seller agreeing the principal terms of the transaction such as price and any conditions which must be satisfied before the sale and purchase can proceed.

     These terms are typically recorded in a letter of intent—otherwise known as head of terms—and the deposit is usually paid at this stage. The letter of intent will usually be stated to be subject to contract which means that until the sale and purchase agreement has been entered into, there is no legal commitment by either party to the other.

     Once the sale and purchase agreement has been entered into, the buyer is legally committed to buy and the seller to sell at the stated price, subject to the agreed conditions.



In a standard property transaction, a deposit of 10 per cent of the purchase price is paid by the buyer. Paying a deposit prior to signing the sale and purchase agreement does not in itself secure the property, but along with the letter of intent, it is an indication that the buyer is committed to the process.

     The deposit is paid by the buyer either to the realtor—if there is one—or to the seller’s lawyers before or upon signature of the sale and purchase agreement.

     The deposit will normally be placed on an interest-bearing deposit account. The interest follows the deposit and so if the sale proceeds normally, the seller will be entitled to the interest on the deposit at completion. If the sale does not proceed and the buyer recovers the deposit, then the buyer will be entitled to the interest.


Sale and purchase agreement

The ‘sale and purchase agreement’ is normally prepared by the seller’s lawyers and submitted to the buyer’s lawyers for amendment or approval. Among other things, it contains a description of the land, the nature of the title—whether freehold or leasehold—and the agreed price.

     The buyer should always be sure to have arranged adequate financing before signing the sale and purchase agreement, or ensure that the sale and purchase agreement is made conditional on securing adequate financing.

     If the buyer is unable to pay the balance of the purchase price at completion, the buyer is likely to, at least, lose the deposit.

     The sale and purchase of a property may be made subject to the satisfaction of one or more conditions. The nature of the conditions will depend on the particulars of the transaction, but may include the buyer securing adequate financing and/or the buyer arranging and receiving the results of various property-related surveys and inspections to its satisfaction.


Land Holding Licence

For those not familiar with the BVI, the terms ‘Belonger’ and ‘Non-Belonger’ can take a bit of getting used to. In broad terms, Belonger status is a legal classification that is associated with a number of British Overseas Territories, though the requirements for the status and the rights that such status confers vary from territory to territory. 

     As far as the BVI is concerned, a Belonger is a person deemed to belong to the British Virgin Islands according to the Virgin Islands Constitution Order 2007. An understanding of the precise definition is unnecessary for the purposes of this guide, but in broad terms, the term Belonger refers to a person of BVI ancestry and other persons who have been granted Belonger status under the relevant immigration legislation. 

     While it is possible for Belonger status to be granted to a person who is a Non-Belonger, the circumstances in which such status may be granted are very limited. It would be unusual to be a Belonger and not to be aware that you are or at least might be.  

     Buyers who are not Belongers are required to obtain a Non-Belongers Land Holding Licence to hold BVI property. For this reason, a sale of property to Non-Belonger buyers should always be made conditional on receipt of a Licence. Licence applications are generally made by the buyer’s lawyers, but in order to make the application, the lawyers need to be provided with certain information about the buyer together with other supporting documents. A Licence application relates to a specific property and a specific buyer.

     The application process for a Licence typically takes approximately three to five months. A sale and purchase agreement will usually provision for 12 months to allow sufficient time for the buyer to secure the Licence.

     If the Licence is not secured within this timeframe, the sale and purchase agreement will often allow the parties to agree an extension of time, or for either party to terminate, in which case the buyer secures the return of the deposit.



Completion is usually arranged to take place within a specific period of time after the last of the conditions in the sale and purchase agreement has been satisfied.

     Upon completion, the seller and the buyer sign an Instrument of Transfer which records the transfer of the property from the seller to the buyer. If the buyer is borrowing money to fund the purchase of the property, then the buyer will need to sign loan documentation at completion.

     The balance of the purchase price is payable at completion. It is generally upon completion that the buyer takes possession of the property.


After completion

Immediately after completion, the buyer’s lawyers will present the Instrument of Transfer to Inland Revenue for payment of stamp duty.

     Stamp duty is calculated as a percentage of the higher of the purchase price and the market value of the property.

     For Belongers, this is four per cent and for Non-Belongers this is 12 per cent. In each case, a copy of a recent appraisal must be submitted as evidence of the market value. After stamp duty has been paid and the Instrument of Transfer stamped, the buyer’s lawyers will submit the Instrument of Transfer for registration at the Land Registry.

     After completion, the buyer will need to ensure that any accounts for utilities are transferred to the buyer’s name.


Personal Attendance

None of the legal procedures associated with buying and selling BVI property requires the personal attendance in the BVI of the buyer or the seller.



Harneys Private Client team regularly advises clients on the acquisition of BVI real estate, including devising ownership structures to satisfy the tax, regulatory, succession planning, and other needs of each client.

     For more information on these solutions or any other matters relating to acquiring property or a yacht, registering a business, or planning for future generations, please contact Sheila George, Johann Henry, or Paul Mellor.

Paul Mellor

Paul Mellor

is a Senior Associate of the Private Client group at the Harneys BVI office. He advises corporate and private clients as well as financial institutions on a range of commercial and residential property matters.
Paul Mellor

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