JUL Y 2009
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33
The buying process
popular. “We’re selling predominantly
The legalities of buying property
investment opportunities with off-
differ enormously from island to plan freehold property in 5-star hotel
INDUSTR
island, making local independent
resorts with leaseback at 50% of the
legal advice a must. In some islands,
rental income based on the type of
a non-resident needs to seek
permission from a central bank
unit,” explains Chris Sawyer at Gem
or government body before the Estates. “This model applies to all the
Y
purchase can proceed, while others
developments we promote in Barbados,
may require special licences or
St Vincent & The Grenadines and
permits. Off-plan properties require
staged payments after an initial
Dominican Republic. Even in today’s
down-payment of around 20-30%,
climate, tourism in the Caribbean is still
while resale purchases require as strong as ever ensuring occupancy
diligence to navigate red tape and
levels in these resorts continue to
ownership complexities before
provide strong rental yields for the
a deposit is due on signing the
PEOPLE
purchase agreement. This money is
Luxury in St Lucia
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Prices for five and six bed freehold villas at Glenconner Beach investor.”
then held in the vendor’s lawyer’s (named after the man who bought Mustique) in St Lucia range from $7m to $12m Most developers offer guaranteed
escrow account until the balance
rental schemes, leaseback and
is paid on completion when the
Peter de Savary’s first boutique resort in a process that makes purchasing easy condohotel options – with fractional
full amount is then transferred to
the seller. The majority of property
the south Caribbean island. Harlequin and straightforward, handled through a opening up top end resorts to a wider
transactions are conducted in US
Property’s tour operator partner, Oasis company based in the Cayman Islands,” buyer market. The developer of Caracola
dollars – even on the islands where Hotels & Resorts, is part of Globalia Corp he explains. “We work with professionals Beach & Spa resort is working with IFAs
it isn’t the official unit of currency.
which owns Air Europa – so they can fly who handle the paperwork and only and a trustee company to offer SIPP
Each island has its own taxation
system.
potential buyers in and look after them. take low deposits which earn interest fractional options in the Caribbean;
DESTINA
A recurring theme among agents and and are not used against the cost of and Harlequin has sold over 100 SIPP-
developers in the region is differences construction.” wrapped options to its investor buyers
the way back into the market, followed in working culture in the Caribbean – through its network of IFAs.
by UK and European buyers.” which is more laid back and at a slower What to sell Most real estate projects in the TION
Geography and accessibility are pace than many international agents Looking at what agents and developers Caribbean are supported by robust
impacting sales. “Due to busy schedules (and their buyers) might be used to. are selling, investor packages are still government investment, but some
and cost, many of our clients are only “Mention real estate in the Caribbean
able to visit the Caribbean once or twice and your taxi driver or bar tender will tell
a year,” explains Knight Franks’ Georgina you that they have a property to sell, or
Richards. “So if we are unable to find they are a real estate agent”, says Chip
exactly the right property for them on Bommarito at the Dominican Republic’s
the first visit, there is often a 6 month North-coast Realty. “Partnering
BUSINESS
wait before another viewing trip can with local, reliable professionals
be arranged; so planning is essential to greatly reduces any ‘cons’ of selling
increase the chances of a sale during the in the Caribbean. You definitely need
first visit.” trustworthy colleagues used to the
Flights are more important than intricacies of the purchasing process
mortgages to most developers, with in each Caribbean destination. Only
several in the region forming alliances to then can you ensure the process runs
bring in more buyers. Mount Cinnamon smoothly, quickly and profitably – all
in Grenada recently partnered with essential to your bottom line.”
Monarch Airlines to offer UK buyers’ free Richard Whitfield, managing director
DE
flights in June and July for a 14-night of agent Half Moon in Jamaica has VEL
stay (and one way flights for those who adjusted the firm’s sales process to Facelift
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Goldeneye in Jamaica include’s Ian Fleming’s original three-bedroom home,
OPER
can only stay seven nights) to view attract more buyers. “We have set up along with Goldeneye Village comprising 18 villas and cottages over 40 acres
appreciation yet remains 50% cheaper investors enjoy the same rights as The Bahamas appliances and fixtures. Despite a
than Barbados (for now, at least). It also native Dominicans; though the era of The Bahaman Government notable levelling of property prices
offers no rental income, capital gains or dirt-cheap property bargains seems announced a package of substantial during Q3 and Q4 2008, the isle of
inheritance tax as well as no repatriation to be long gone. Nonetheless, prices benefits under the 2008/2009 Grand Bahamas is still considered to
M
tax. are favourably competitive with a budget through the exemption of be under-valued due to a slow initial ARKE
perpetual increase in tourists driving stamp taxes and the reduction and pace of growth. Foreigners can own
Dominican Republic property values. Multi-million dollar elimination of duty on a variety of land directly and benefit from strong,
TING
Since 1998, the Dominican Republic infrastructure projects to improve building materials, appliances and established and mature property
has enjoyed a boom in property access by road, air and ferry will help fixtures. In addition, homeowners rights – not to mention no personal
investment after President Leonel and, by 2012, visitor figures are tipped wishing to go green can also realise income tax, capital gains, sales, or
Fernandez Reyna lifted the restrictions to reach 5m per annum – up 1m on savings through the reduction and/or estate tax and a comparably low rate
on foreign ownership. Today real estate 2008. elimination of duty on energy-saving of property tax.
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