Why Barbados Real Estate?
The Barbados real estate market is one of the most robust and resilient in the entire Caribbean region as it’s easily and directly accessible from North America, UK and Europe, and because it has such a fabulous tourism offering.
- Foreign buyers are legally allowed to own free title to real estate in Barbados.
- Even during the peak of the global financial crisis Barbados’ property market retained strong buyer interest, and price adjustments were relatively small.
- Britain’s Financial Times ranks Barbados one of the top 10 most attractive countries for direct foreign investment in the Caribbean and Central American region, and The Telegraph rates it as the 5th best place in the world to buy abroad.
- Tourism underpins international interest in real estate on the island, and despite a series of minor shocks to the sector in recent years it is now back on target to rise 3.2% p.a. to 2024.
- The familiarity of the property buying process on the island, coupled with its reputation as a stable and transparent sovereign island country gives international buyers absolute confidence in the real estate sector.
- The government understands the need to enable tourism and construction, and the requirement to attract foreign direct investment; as a result it is progressive and enjoys strong and positive international relations.
- Barbados has excellent infrastructure and amenities – from medical facilities to schools, and from a real depth of cultural to world class sporting facilities. This makes it a realistic place to live or winter, as well as an incredible place to go on vacation.
- Barbados is economically and politically stable and enjoys very low crime.
- The island suffers from an unemployment rate of ~12.9% and an extreme contrast between the wealthiest and poorest citizens; therefore the government has work to do to develop employment and bridge this fiscal gap.
- The government has committed to enabling economic diversification. Their commitment has been assisted by the likes of European Union financing for the modernization of the international business and financial services sector.
- Private investors looking for an exceptionally robust market, where demand for tourism rental stock is already intense can find a profitable market in Barbados.
Real Estate Investment, Taxes and Doing Business in Barbados
Please contact us for prices of real estate for sale in Barbados, as well as current rental rates.
- Foreign buyers require permission to buy real estate from the Central Bank of Barbados, but this is just a formality.
- Funds remitted to the island for a real estate purchase have to be registered with the Central Bank.
- As a result of these formalities, and to enable a smooth transaction, buyers are advised to retain the services of a lawyer when buying property in Barbados.
- Real estate finance is available to qualifying purchasers. Some developments offer fractional ownership, and others under construction accept stage payments.
- The costs associated with buying property are relatively low. However, real estate round trip transaction costs are high because a vendor is subjected to various additional fees.
- To buy property the transaction costs are only in the region of 1.2 – 2.3%. To sell the transaction costs are between 10 – 11.5%; inflated by estate agents’ fees and a transfer tax.
- Properties forming part of a development and apartments in complexes will be subject to annual service charges. These are usually calculated according to the square meter of the property.
- Additional costs a buyer needs to be aware of include management fees if they utilize an agency for the rental of their property, property and contents insurances and land tax.
- The good news is there is no capital gains tax or inheritance tax in Barbados.
- Rental income is taxed at 15% for residents and 25% in the form of a withholding tax for non-residents. This withholding tax is credited to an investor’s final tax liability. For individuals the tax year is the calendar year.
- Non-resident investors can use an offshore company to hold real estate assets in Barbados to legally avoid transfer tax and stamp duty on a subsequent sale.
- The British Virgin Islands is a favored jurisdiction for offshore company registration for this specific purpose.
- At resale a buyer who is also non-resident buys the company that owns the real estate, as opposed to the property itself. This is legal.
- Whilst Barbados is considered to be a center for luxurious, multi-million dollar property in the Caribbean, there are actually lower cost entry points to the real estate market from just $150,000 – $200,000 for a basic apartment, or less for a small plot for development.
- During the worst of the economic crisis post 2008, the lowest and highest ends of the market retained the strongest international buyer interest.
- Buyers purchasing specifically for investment purposes who want to leverage their assets for the strongest rental returns are advised to buy as close to the beachfront as possible, and/or to buy within a resort such as Royal Westmoreland with the best amenities.
- An apartment overlooking the beach is far more in demand and profitable than a larger property inland. And even modest resort apartments with access to a clubhouse, golf course, swimming pools, spa, tennis courts and a restaurant are much more profitable than apartments with no access to amenities.
- Barbados Property Investment Visa
- Buyers don’t need any form of visa to purchase real estate in Barbados.
- Citizens from the US and the UK do not require a visa to visit Barbados. Required documentation to enter Barbados is a valid passport, return ticket, intended address whilst in Barbados and evidence of personal support.
- In theory it is very easy to take up residence in Barbados. An application is made at the immigration department, and proof that an applicant will not become a burden to the nation will be required. People of independent means and good character will likely be granted residency.
- It is also very easy to establish a business in Barbados, because the island nation is keen to encourage entrepreneurship and inward investment. There are tax incentives for establishing an operation in Barbados.
- Short and long-term work permits are available in Barbados. The key requirement to obtain such permission to take up employment is for the prospective employer to be able to prove that no resident or Barbadian national is capable or willing to fulfill the requirements of the position in question.
Barbados Real Estate Markets of Interest
Despite being considered a Caribbean island destination and being the easternmost island in the Caribbean region, Barbados is actually surrounded by the Atlantic Ocean.
Its east coast bears the brunt of the Ocean’s force sometimes, and as a result of strong tides and powerful waves, many of its beaches are dangerous for swimming.
The west coast is the most desirable from a tourism and real estate investor’s perspective; however it is already highly developed and those seeking greater choice may prefer to target the slightly less developed regions.
Property located to the south and west of Barbados is higher priced and in greater demand. Properties to the north and east are more affordable in relative terms, and it is easier to find new opportunities for development therein.
For the most luxurious homes consider St James on the west coast of Barbados, the parish is sometimes referred to as the Platinum Coast because of its wealth of fabulous real estate.
What to do next if you are interested in Barbados Real Estate
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