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Purchasing property in the Turks and Caicos Islands

Over the past decade, the Turks and Caicos Islands have experienced phenomenal growth and development. Generally real estate values have increased steadily over this period. With its tax benefits, stable government and safe environment, purchasing real estate in the Turks and Caicos Islands may be the best way to preserve wealth in today’s economy.

WHY INVEST IN REAL ESTATE IN THE TURKS & CAICOS ISLANDS?

  • No annual taxes on property held
  • No income taxes on revenue generated
  • No capital gains taxes on disposal of property
  • Any nationality may purchase and hold land
  • Use of the US dollars minimizes currency fluctuations
  • We enjoy one of the lowest crime rates in the Caribbean
  • British Dependent Territory status ensures an accountable legal and political system
  • Register absolute title is guaranteed by Crown; Title insurance is unnecessary
  • Title can be held personally, or confidentially, in a local Corporation or Trust
  • Strata Title registration Ordinances provides for freehold title in a condominium
  • Land Register system provides details of ownership, title, mortgage, charges, etc
  • All necessary safeguards are in place and internationally recognized
  • Planning and Development Authority oversees building codes and development plans to help ensure sustainable development
  • Permanent Residency status can be achieved with real estate investment of only $500,000.00 compared to as much as $1,000,000.00 in other countries
  • The islands have experienced a steady appreciation in property values during past decade

WHAT ARE THE PURCHASE PROCEDURES IN THE TUKS & CAICOS ISLANDS?

Once your property is selected, a real estate purchase involves the signing of a Purchase and Sale Agreement and payment of an initial deposit, usually 10% of the purchase price. The Realtor or the Seller’s Attorney holds the deposit in trust pending closing. The date for closing the transaction is fixed by agreement between parties. On closing, the transfer Document is handed over to the Buyer’s Attorney in exchange for the remainder of the purchase price. The Buyer’s Attorney lodges The Transfer Document with the Land Registry. The Registrar deletes the name of the Seller and inserts the Buyer as the new owner of the property. At the time of registration, the land value will be established by the sale price or Government appraisal for the collection of Stamp Duty.

What is Stamp Duty?

Although there are no property taxes or other direct taxes in the Turks and Caicos Islands, stamp duty is payable on most real estate transactions. Generally, stamp duty in respect of registerable transactions must be paid within 30 days of completion of the transaction. This is chargeable where property in TCI is transferred from one party to another resulting in a change of beneficial ownership. Generally, the purchaser will be liable for the payment of stamp duties and this should be factored into cost calculations. In practice, payment of Stamp Duty is a prerequisite to having your name entered on the Register as the new proprietor.

Strictly speaking Stamp Duty is calculated as a percentage of the "value" of the property transferred as opposed to the actual price paid. In other words, if you purchase TCI property you will typically pay Stamp Duty calculated on the purchase price. However, the Registrar of Lands may refer a transfer to the Land Valuations Officer for a determination of the value and if his assessment is greater than the price that you paid, Stamp Duty will be calculated on the higher amount.

Government charges a lower rate of Stamp Duty on transfers of property on some of the less developed islands. This reduction was introduced in order to encourage inward investment into those islands. For the bargain hunter, it is a buyers market on the islands of Grand Turk, Salt Cay, South Caicos, Middle Caicos and North Caicos, representing a significant saving for purchasers of property on those islands. Usually, the purchase price is the benchmark for calculating stamp duties however the Land Valuations Officer can (and occasionally does) carry out his own valuation as stamp duty is calculated on the value of the property.

STAMP DUTY

The Buyer normally pays stamp

Duty For Sales under $25,000:
  • Stamp Duty does not apply.
For sale between $25,000 and $75,000:
  • 6.5% on Providenciales, Parrot Cay and Water Cay, 2% on Grand Turk, Middle Caicos, South Caicos, Pine Cay, North Caicos and Salt Cay
For sales above $75,000:
  • 9.75% on Providenciales, Parrot Cay and Water Cay 5% on Grand Turk, Middle Caicos, South Caicos, Pine Cay, North Caicos and Salt Cay
NOTE: Stamp Duty does not apply to chattels. The Government reserves the right to assess a value higher than the sale price for purpose of Stamp Duty, if it feels a property sells below market value. There is also Stamp Duty of 1% of the sum secured by a mortgage.

LEGAL FEES

Each party is normally responsible for its own legal fees. Attorney’s fees vary depending upon the amount involved. The Bar Association scale minimum fee is stated to be 1% - 2% on the first US$100,000 and 1.5% on the balance. Given the strength in the Turks and Caicos Islands property market and the larger sums now involved attorneys will negotiate fees. Legal fees on transfers in excess of US$700,000 are in the 1% range with transactions over US$1 million about 0.85%.

Financing costs:

Banks in the Turks and Caicos Islands will generally lend up to 70% of the value of the property being purchased. Trust companies will lend up to 50% of the value. Trust companies are simpler to deal with however their rates are higher than those offered by the banks. Foreign purchasers should be prepared for higher interest rates than they may be used to at home - e.g. 8.5% fixed for 3 years amortized over 15 years.

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