Here are simple answers to some of the most common questions potential buyers ask about entering the Cayman Islands property market.
Buying a property in the Cayman Islands is a straightforward and speedy process. If you have the financing in place, you can simply choose a property from the Cayman Islands real estate listings and complete the transaction in as little as a couple of days, whether you’re a resident or a foreigner. There are no restrictions on foreigners owning a property or a piece of land, and there are no annual property taxes or capital gains tax to worry about. The Cayman Islands government guarantees title and encourages foreign investors, making Cayman rental properties and real estate investments a popular choice with foreign buyers.
Here are six of the most commonly asked questions about buying Cayman Islands property:
What is Stamp Duty? Stamp duty is the only form of taxation that the Cayman Islands government imposes on property transfers, conveyance of property, and sale of land. It’s a one-time fee of 7.5% of the value of the property purchased by non-Caymanian buyers and is payable immediately to the government. First-time buyers who are native Caymanians are eligible to have the stamp duty reduced or waived under several conditions.
Can I Get a Mortgage Locally? Mortgages are available from local banks for property purchases by foreigners. If already resident, a foreigner must have been resident for at least six months and is expected to provide a deposit of between 5% and 20%, depending on the bank. A non-resident buyer will usually have to provide a deposit of 30% to secure a mortgage. A local mortgage attracts a further 1% or 1.5% stamp duty, depending on the amount borrowed.
How About Insurance? If you buy a property using a loan from a local bank, you will be expected to buy a property insurance policy as well as life insurance for the amount of the mortgage.
Should I Hire an Attorney? As in most things legal or financial, it is wisest to hire a professional to work on your behalf to prepare the necessary paperwork and registration fees. Budget around 1% of the total purchase price of the property for this service. If you are applying for a mortgage from a local bank, then also expect to pay the bank’s appointed lawyer’s fees, which will be discussed with you during the loan negotiation process.
Should I Hire a Real Estate Agent? The majority of real estate transactions in the Cayman Islands are handled by members of CIREBA (the Cayman Islands Real Estate Brokers Association), a professional body. Not only do you pay no fee to a real estate broker (as a buyer, you don’t pay a commission, that’s the seller’s responsibility), but you also get an expert negotiator. CIREBA realtors know local lawyers, bankers, surveyors, appraisers, home inspectors, contractors, structural engineers, handymen, and property managers. Their experience is highly valuable in helping steer you through the large selection of property for sale in the Cayman Islands.
Are There Any Hidden Costs? In total, Cayman property buyers can expect to pay an additional 10% to 12% of the purchase price in additional costs. These include the 7.5% stamp duty, a home inspection report, mortgage, and legal fees.