Buying property in Barbados is advantageous for many reasons. Not only does the island boast a high quality of living, year-round sunshine, fantastic beaches and a stable society, but there are no barriers to owning property even if a person is not a resident of the island.
That’s correct. There is no restriction for foreign ownership of even prime real estate in Barbados, with residents and non-residents being treated equally. Property may be owned by an individual overseas, a legal entity, or an international company, as long as it is registered as an external company on the island.
Often, property bought by an individual is managed through a trust. However, there are a few ownership options for purchasing property in Barbados. The best choice for the buyer depends on their objective for the property, for instance, long term residential use, short term flip or rental investment. We’ve put together this handy guide to help you decide what is best for you and explain the process of buying property in Barbados in further detail.
Direct ownership – best for Long Term Residential use
Direct ownership of a property can be the most cost-effective option for persons purchasing property in Barbados with aims to reside long term. Direct ownership would also eliminate the incorporation and registration costs of purchasing through an offshore or local company.
Offshore Company – best for Medium Term Flip
Property ownership through an external entity such as an offshore company structure may be the best option for those aiming to ‘flip’ a property. Using this method, persons can avoid property transfer tax and stamp duty which would otherwise be required to sell property on the island.
Local company/Offshore company – best for Rental Investment
Regarding property purchased with rental investment in mind, purchasing through a local or offshore company structure is ideal. It would decrease the tax payable on rental income to a total of 5.5 per cent tax rate, which will help reduce overall property-related costs.
Exchange Control when buying property
If you are an individual purchasing property in Barbados as a non-resident, you will be subject to the approval of the Exchange Control Authority before the sale.
If both entities involved in the purchase and sale of property are non-nationals and the sale is conducted in US dollars, then it is subject to the approval of the Exchange Control Authority.
Luckily, this is routine and granted in good time in both cases. However, buyers and sellers should note that if the money for the purchase of the property brought into the country is in a foreign currency, it must be registered under the Central Bank of Barbados to transfer the funds outside of Barbados, and there will be a 2 per cent foreign exchange tax.
What Costs can the Purchaser buying property in Barbados expect?
The costs for the purchaser would include legal fees and ownership structure costs. The legal costs are typically 1.5 – 2 per cent of the purchase price and 17.5 per cent local Value Added Tax (VAT). The ownership structure is USD $5,000 if a corporate ownership structure is used to purchase the property.
What Costs can an Individual selling property in Barbados expect?
Some of the costs an individual can expect with the direct sale of property in Barbados include stamp duty, legal fees, fees for the land surveyor, property transfer tax for land, and property transfer tax for house and land.
How Buying Property in Barbados works?
The transfer of property between seller and purchaser is reasonably straightforward. Once a purchase price is agreed upon, the realtor handling the process will typically require the seller and purchaser to sign an offer and acceptance agreement, with around 30 days for the purchaser to sign the agreement. This is typically undertaken between each party’s lawyers.
The sale and purchase agreement is signed between the purchaser and the seller. This agreement includes a deposit, usually at least 10 per cent of the cost. Once the purchaser’s attorney has verified that the seller has good title to the property, the conveyance of the title from seller to purchaser is the next step. Finally, evidence of the new ownership is added to the Barbados land registry for their records.
In the case of a company transferring shares to purchase a property, a share sale agreement will be made by the legal advisors. If it is an offshore entity, the vendor will undertake a thorough corporate search of the company. After completion of the transfer of shares to the purchaser, the property is registered as having been sold and is then owned wholly by the purchaser.
Residence Barbados is happy to assist you in finding the right property to make your dream of a tropical Barbados lifestyle a reality. With its pristine beaches, lush interior, tropical climate and warm, welcoming people, there’s no need to find any more reasons to buy property in Barbados. But in case more are needed, consider its rolling hills, historic sites, top-tier golf courses, and active ex-pat communities. Even better, it’s just as easy for a non-national to acquire property in Barbados as it is for locals and residents on the island.
We can also introduce you to lawyers, tax consultants and mortgage providers who will be able to assist you at every stage of your purchase.
Are you interested in buying property in Barbados? Fill in our registration form, and a team member will reach out to you. Or simply contact us via WhatsApp at (246) 230-4982.
Content Disclaimer
The information contained above is provided for information purposes only. The contents of this article is not intended to amount to advice and you should not rely on any of the contents of this article. Professional advice should be obtained before taking or refraining from taking any action as a result of the contents of this article. Residence Barbados disclaims all liability and responsibility arising from any reliance placed on any of the contents of this article.
