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How to Buy and Build in the BVI
PURCHASING REAL ESTATE IN THE BRITISH VIRGIN ISLANDS
Alien Land Holding License
All investors, including citizens of the United Kingdom are required to obtain an Alien Land Holding License to purchase property in the BVI. Agreements to purchase property are therefore made contingent upon a license being obtained by the purchaser. A License gives entitlement to own a specific property.
Application for a Non-Belongers license is made to the Minister of Natural Resources, Government of the British Virgin Islands and must be supported by two character references, financial references and a police certificate of good standing.
If an application for a license relates to undeveloped or partially developed land, the applicant will be required to make a commitment to the BVI Government to expend a specific sum on development within a period of time, usually 3 years. The development requirements will be over $250,000 and will generally be proportionately more according to acreage. Environment and other planning considerations will determine the appropriate level of development. Sub division is only allowed if part of a comprehensive development.
A property cannot be resold until the development commitment has been fulfilled. One of the objectives of the licensing regulation is to prevent speculation on undeveloped property.
The Minister of Natural Resources and Labour is responsible for approval of License application except those in respect of sites which extend to more than three acres are referred to the Executive Council.
There is a license filing fee of $200.00 for each person or $500.00 for a company named in the application. Typically approval may take between three and six months to obtain. The fee for the grant of the License is $600.00 for each person or $1000.00 for each company named in the license.
An overseas investor is free to let a property on a long term or short term holiday basis upon approval of a trade license application (see trade license requirements). We can assist with whatever rental management you require.
Procedure for Purchasing Property
1) Find the Property: Let us help you find your dream home or piece of land to build on.
2) Earnest Deposit and Letter of Intent: It is normal practice for a prospective purchaser to submit a ‘Letter of Intent to purchase’ along with a 10% earnest deposit to the Vendors agent to be held in escrow prior to signing of a purchase and sale agreement. Although payment of a deposit does not bind the vendor or their agent legally it is taken as a clear indication that a purchaser intends to sign a purchase and sale agreement forthwith. Interest earned on this deposit goes to the vendor. We will work with you to prepare the Letter of Intent and negotiate an acceptable Sales deal with the Vendors agent
3) Purchase and Sale Agreement: Once agreement in principle has been reached between the Purchaser and the Vendor, a legally binding ‘Purchase and Sale agreement’ drawn up by attorneys is signed by the parties. This will normally contain a condition that completion of the purchase is contingent upon the purchaser obtaining an Alien Land Holding License. We can recommend excellent lawyers to work with you on the Purchase and Sale agreement.
4) Application for an Alien Land Holding License: This may be made prior to, and in any event should be made as soon as possible after signing of the purchase and sale agreement. If you are not from the British Virgin Islands (Non-Belonger), the property must be advertised in one of the local BVI papers to allow a Belonger or Resident to purchase the property at the same price and terms as your offer. If no such offer is forthcoming, the Non-Belonger application is submitted to Natural Resources in the BVI government for approval.
5) Completion of the sale and transfer of title: This will normally take place within 30 days after receipt of the Alien Land Holding License. Payment of the balance of the purchase price is due at this stage. For Non-Belongers, a 12% stamp duty on the purchase price or appraisal price (whichever is higher) will be required to transfer the property into their name; Belongers pay a 4% stamp duty on the purchase price or appraisal value (whichever is higher). A recent appraisal of the property will be required in order to complete the transfer.
Note: Neither purchaser or vendor need be present in the BVI at any stage of the transaction.
Attorneys
The legal system in the BVI is based on English common Law and locally enacted legislation. It is essential that the purchase appoints any attorney in the BVI to act in the purchase transaction. An Attorney’s responsibilities will normally include submitting the application for an Alien Land Holding License. Standard conveyance fees are 1.5% to 2% of the purchase price, depending on the value to the property. We can recommend excellent lawyers to work with clients.
Tenure and Registration Section
The majority of land in the BVI is owned in fee simple. A purchaser will normally acquire absolute title which is registered in the BVI Government land Registry. Registered titles relate to a detailed cadastral survey which defines legal boundaries. No transfer of land can take place unless the boundaries of the property have been determined to the satisfaction of the Registrar of Lands. Property in the BVI may also be held on long lease from the Crown or private individuals. Most often the duration of such leases is 99 years. For practical purposes a purchaser of such a leasehold interest will enjoy all the benefits of an absolute title for the duration of the lease.
Financing a Purchase
Banks in the BVI offer worldwide banking service. Mortgage finance of up to eighty percent of the appraised value of a property or the purchase price, whichever is the lesser, will usually be available to overseas investors subject to status. Construction financing is also available. Mortgages are granted for terms of up to twenty years. Interest rates are generally 1 1/2% above New York Prime rate. Banks will consider financing the purchase of land. (See listings of banks in the Category section).
Real Estate Tax
On the transfer of title to a property stamp duty at the rate of 4% to 12% of the price or appraised value is payable by the transferee (purchaser). Land Tax is assessed annually at the rate of $50 for sites up to .5 acre, $150.00 for sites between 0.5 and 1.00 acre and $50 for each additional acre or part thereof. House Tax at the rate 1.5% of the assessed annual rental value, are levied. In practice this means that for an average two or three bedroom house the annual taxes will be less than $500.00.
Building a House
Building costs vary between $250.00 and $300.00 per square foot for quality construction and finishes. A swimming pool may cost in the range $40,000 to $60,000 to construct. Several fist class architects and contractors are based in the BVI and good skilled labour is available. Architects fees will vary according to their level of involvement, responsibility and the complexity of the work. Design and supervision will generally cost approximately 10%. From a planning stage a house may take 9 to 18 months to complete.
If you are wishing to customize your own home, you can buy land and build your own home. There are good architects on the island that are very familiar with the requirements who can help you design a home and get it approved by Town and Country Planning. Listed below are several well known architects that you could choose from.
There are also some builders on the island who will allow you to purchase their land and choose from several standard designs and then build and customize your home for you. The value to you is that stamp duty is only charged on the land value, not the whole project. In addition you get a reliable builder who can deliver a quality home to you on schedule. We have several builders listed in our Sales listings who we can recommend if you are interested in this approach.
Architects
Michael Helm Architects
http://www.michaelhelmarchitects.com
Roger Downing
http://www.architecture.vg
OBM International
http://www.obmi.com
Smith Arneborg
http://www.bviarchitects.com
Caribbean Architecture Limited
(284) 494-1913
Planning & Building Control
Development in the BVI is governed by Land Development Control Authority who are concerned with planning matters and by the Building Authority who are responsible for ensuring that building conforms with the building code guidelines. It is preferred if working drawings submitted to these authorities are prepared by architects based in the BVI.
Import Duty on Possessions and Furnishings
Within six months of first arrival in the BVI, each adult immigrant or person staying for more than six months is permitted to import up to $1,000 worth of used possessions and furnishing without incurring liability to import duty. After six months such items are subject to duty at a rate which varies between 5% and 20%. Import duty on vehicles is 20%.
Utilities and Services
Electricity: A reliable 110V, 60 cycle mains supply is available on Tortola, Beef Island, Virgin Gorda, Great Camanoe and Anegada.
Water: Although main water is available in Road Town and several other parts of Tortola, most water is economically provided by roof catchment of rainwater which is stored in cisterns integrated with the foundation design of each building.
Sewerage in Road Town there is a main sewerage system. Elsewhere private septic tanks are the normal Internet-High speed DSL internet is readily available throughout the BVI
Immigration
Purchase of a property in the BVI does not in itself establish resident status. However an identification card is available to a person who holds an Alien Land Holding License which will allow the holder to be granted leave to land in the BVI for a period of up to six months. A certificate of residence, entitling the holder to land or embark in the Territory for an indefinite period, may be granted to a person who intends to reside permanently in the BVI.