Buying in Barbados
Barbados is the number 1 destination in the Caribbean for UK residents, with daily direct flights bringing over 1 million visits annually!
The Caribbean island offers sunshine everyday, all year round, with constant trade winds offering cool breezes to keep the temperature around 28C during the day and around 23C at night.
December to May in Barbados are mainly the driest of months, while afternoon rain showers fall during the months of June to November. Although the rain can sometimes be a heavy tropical rain storm, these are often welcome to cool down from the warming sun and nearly always only last up to 30 minutes.
Whether you’re a welcomed and well-loved tourist, or a laid back, loyal local – there really is something for everyone on the idyllic island of Barbados. Rolling lush hills, flourishing botanical gardens, colonial plantation homes, dramatic cliff lined coasts, world-class restaurants, spectacular flat, calm beaches and a varied cultural calendar in which fish festivals and reggae carnivals sit alongside sailing, cricket and polo tournaments.
When buying a property in Barbados you can expect to encounter the following costs;
Legal Fees (Attorney) = 1.5% to 2% +VAT
When selling a property in Barbados you can expect to encounter the following costs;
Legal Fees (Attorney) = 1.5% to 2% +VAT
Agent Fees (Realtor) = 4% to 5%
Government Fees (Transfer Tax) = 2.5%
Government Fees (Stamp Duty) = 1%
Finance & Mortgages
Foreign buyers typically purchase property in Barbados with cash. The source of cash can come from a variety of places; savings, inheritance, pension or re-mortgaging their UK property. Regardless of the source, it is very important to make sure the funds are readily available as having the cash locked in bonds or accounts that need notice to release can cause delays, if not aborted sales.
Barbados banks do offer mortgages to foreigners, however generally speaking the banks loan 60% to 70% of the purchase priced US$250,000 or more. Although this opens up more opportunities, you will still need a large deposit of 30% to 40%.
General mortgage terms in Barbados are for full repayment and interest monthly on a 15 year contract. With interest rates being a lot higher than the UK it is often cheaper/easier/quicker to look for other ways to raise finance from the UK (for example, remortgaging a UK property to release equity). If you wanted to discuss your options with our overseas mortgage broker you can contact us here; [email protected]
There are no restrictions to foreign nationals owning and/or inheriting property in Barbados. If the estate consists of property in Barbados then the laws of Barbados are applicable.
Something that entices foreign buyers to Barbados is that there are no inheritance or gift taxes! You will however be liable to property transfer tax if transferring real estate to another person.
The amount of tax paid varies depending on the level of revenue generated, but property rental income is 15%.
Tax Returns are due annually with deductible expenses allowed.
Ways to Purchase
When buying a property Barbados, there are no restrictions to foreign ownership. But there are usually two primary routes to purchasing a property.
Domestic Conveyance (property in your name)
Once you’ve found a property and agreed a purchase price, both the seller & buyer sign a sale and purchase agreement and a deposit of 10% is held in escrow until completion. The remaining balance of the purchase price is paid over at completion. Before you pay the deposit you must register the funds with the Central Bank of Barbados (due to an exchange control regulation in place for foreign currency brought into Barbados). During the purchase, your attorney will verify free and clear titles to the property and ensure that there are no other impediments to the sale. Upon completion, there will be a conveyance of title to the purchaser which is evidenced by the recording of title deeds at the Barbados Land Registry.
Offshore Company Ownership (property in a company)
The process is nearly the same, once you’ve found a property and agreed a purchase price, both the seller & buyer sign a sale and purchase agreement and a deposit of 10% is held in escrow until completion. The remaining balance of the purchase price is paid over at completion. Due to the property being owned/purchased by an offshore company, there is no requirement to register the funds with the Central Bank of Barbados. During the purchase, your attorney will verify free and clear titles to the property and ensure that there are no other impediments to the sale. Alongside this, a complete corporate search of the offshore entity will be conducted and upon completion the shares of that company are transferred to the purchaser.
The main reason an offshore holding company is used to purchase a property is to circumvention the payment of property transfer taxes and stamp duty as well as Barbados exchange control regulations which allows for future sales of the property to be in United States dollars or other currencies.
Frequently Asked Questions
There are no restrictions on non-nationals to purchase a property in Barbados. However, you must apply for permission from the Central Bank of Barbados to register any money brought into Barbados (unless purchasing a property in an offshore company).
No. You’re welcome to make Barbados your home, however you remain a tourist and can utilise your standard 3-6 month tourist visa when you visit. Should you wish to stay in Barbados longer than 6 months you may require a special entry permit.
There are no benefits (for property ownership) in getting Dual Citizenship.
A deposit of 10% is required on exchange (unless otherwise agreed).
No! The seller is responsible for paying stamp duty (unless the property is held in an offshore company, in which case there is no stamp duty).
The average purchase/sale in Barbados takes 2-3 months.
Capital Gains Tax is 0%
Corporation Tax is 25%
Income Tax is 12.5% Basic Rate (<BBD$50,000)
Income Tax is 28.5% Higher Rate (>BBD$50,000)
Property Transfer Tax is 2.5%
Stamp Duty Tax is 1%
Value Added Tax (VAT) is 17.5%
No, however it may be easier to keep money in a Barbados Bank Account in order to pay regular bills (such as land tax, utility bills, wifi, tv etc)
Harding’s International Real Estate