Barbados Real Estate: What You Need To Know About Buying Property In Barbados
A guide to buying real estate in Barbados
There are no legal restrictions for non-nationals wishing to purchase real estate in Barbados. However, due to the peculiarities of local conveyance laws, the absence of title insurance, unregistered title deeds, and other factors, a lawyer is required to purchase property in Barbados. This article focuses on the steps required to close the deal once you have completed your negotiations with the seller.
The Sales Agreement
Once negotiations are complete, your attorney will contact the seller’s attorney and prepare the agreement for sale. Once the agreement is signed, it is customary for the buyer to put down a deposit of 10% of the purchase price. The agreement, along with the deposit, is delivered to the seller’s attorney. The seller will then sign the agreement and a copy of the agreement will then be given to the buyer’s attorney.
Title Research
The next step is to have your attorney conduct a title search to ensure that the seller has good legal title to the property and that there are no liens such as mortgages, charges, or encumbrances on the property. Liens can also take the form of unpaid judgments, outstanding water bills, and unpaid property taxes.
Completion of the sale
Once the title search is complete and all liens are removed, the seller’s attorney will prepare the conveyance documents for closing. At closing, the seller’s attorney will typically exchange the conveyance documents, along with any prior title deeds, for the balance of the purchase money.
Financing for non-nationals
There are mortgage options available for non-nationals. The Barbados mortgage market is not as mature as the US or UK market and therefore does not offer the variety of mortgage options available in those more mature markets. However, attractive terms are still available, with loan-to-value ratios up to 70%, 20-year terms, interest-only options and LIBOR-linked rates. Mortgages are available in US and Canadian dollars, as well as in British Pounds and Euros.
closing costs
The seller of the property will be required to pay stamp duty and property taxes. Stamp duty is currently charged at a rate of 1% of the purchase price. The transfer tax is charged at a rate of 2.5% with respect to land where there are no buildings; and in the case of building land, 2.5% on the amount in which the greater of the purchase price or the value of the land exceeds $125,000.
Attorney’s fees
Lawyers’ fees are governed by the Barbados Legal Profession Rules 1997, which prescribe a scale of minimum fees to be charged by lawyers acting in specific non-adversarial matters. The fee charged is a variable percentage of the cost of the property being purchased. The scale fee is a minimal fee, and the attorney has the right to increase the fee to take into account their years of experience and the complexity of the transaction. An additional charge of 15% VAT (Value Added Tax) must be paid on the lawyer’s fees.
Disclaimer
The article is not intended to be exhaustive, nor is it an adequate substitute for proper legal advice. Anyone considering buying Barbados real estate is strongly advised to obtain local legal representation and tax advice in connection with any proposed purchase of property in Barbados.