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How to Buy

PROCURING FINANCE – There are a growing number of real estate agents and resources that are available to assist buyers with selecting the right home for purchase at the right price.  And, there are a number of financial institutions in the Territory, all offering to assist you with financing your home, providing you fulfill their lending criteria.

Of course, it must be stressed that if you are not a BVI citizen, you must be in possession of a Non-Belonger Land Holding Licence in order to own property in the Territory.  To acquire a licence, a completed application with all supporting documents should be submitted to the Ministry of Natural Resources and Labour.  Full details of the documentation will be available in the May 2007 edition of the BVI Property Guide.

Financing your BVI home
Financing institutions require that you show good fiscal management in your personal accounts for approval of home loans.  Banks in the Territory provide competitive packages for home purchasing, for example, Banco Popular offers include fixed interest rates averaging from 6% to 6.5%.  Presently, interest rates can go up to 8%.  The average time allotted to repay mortgages is 30 years; however, First Caribbean International Bank offers a 35 year repayment plan if required.

Most applications require the usual proof of identity, proof of income and a statement of your banking history.  You may also be asked for credit card, checking and savings accounts statements.  For United States citizens who have recently moved to the BVI, Banco Popular requires that you provide statements of your federal taxes filed in the States.  Self-employed persons are required to submit a financial statement showing earnings for the past 3 years.
    
For non-belongers that have not acquired a Non-Belongers Land Holding Licence, financial institutions generally accept proof of the submission of an application for such a licence.  Banks also approve loans to be used providing the licence to own property in the BVI is forthcoming.  Loans can be held for up to 1 year while such licence is being processed.
    
While the mortgage application process varies from one week to one month, applicants are advised to submit all necessary documents with the application to allow for faster processing.  The longer mortgage officers have to wait for financial statements, job letters, pay slips or a bill of sale, the longer you will have to wait to close on your new home.
    
Banks generally do their own appraisal of the property.  FirstBank charges applicants a set fee of $500 for the appraisal, while Banco Popular will make a request for appraisal at a charge to the loan applicant. First Caribbean International Bank however, does not request an alternate property appraisal.

Once all paper work is in, the bank then looks at your financial history and your means of repaying the loan to offer the most manageable mortgage package.  It is a good idea to shop around for a mortgage.  Consider the amount you would like to pay monthly, the period for which you desire to have a mortgage and your current and future employment, and then select the best mortgage offer.  As a rule of thumb, your monthly mortgage should not exceed 32% of your monthly salary.

Finally, in your calculations for a new home, please do remember to include the stamp duty tax and your annual property tax.  For citizens of the BVI the stamp duty is 4% of the cost of the property and for non-belongers it is 12% of the total cost of the property.
 
In accordance with the recently amended Property Tax Act, the annual property tax is due in September.  Upon purchase of the property, officials from the Inland Revenue Department will appraise the property to determine the potential rental value.  Consideration of surrounding properties is also taken into account to determine this appraisal.  A property tax of 1.5% of the annual potential rental value is then charged.  Both stamp duty and property tax are paid at the Inland Revenue Department.
    
Once you acquire all the appropriate documents, you will find that purchasing a home in the BVI is much easier than you anticipated.  With the Territory’s economy growing and measures taken to support that economy, residents will tell you that now is the right time to purchase in the BVI.  Happy buying.

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