You’ve been dreaming about it for years:
• You open your eyes in the morning and the first thing you see through the window is a spectacular view of the ocean.
• You walk along a white sand beach that’s accessible by merely walking out your back door.
• You live simply, purposefully and in a much more laid-back manner, in a place where the culture is very different from your own and engages you in a much richer way.
This can be more than just a dream. In Belize it’s quite easy to turn this dream into a reality.
Belize is the up and comer travel destination. It’s rich in natural wonder, it’s friendly and it offers the ultimate beachfront lifestyle.
It’s also affordable. In fact, if you dream of living the easy life by the ocean, you’ll find Belize is actually the best deal in the Caribbean.
The technicalities of purchasing this dream aren’t complicated. Belize loves foreigners and is ready to welcome you with open arms. Even so there are a few things you should know. Below I’ve outlined some of those things so when you find the beachfront property of your dreams and are ready to purchase, you’ll already be familiar with the buying process.
The first thing you’ll be asked to sign when you find a property is a reservation agreement. The time frame in them can vary, but generally these agreements give you 30 days to perform due diligence, ask questions, do research, and eventually discover whether the property and the country are really something you want to buy. While you’re doing your due diligence, the property will be pulled off the market. This is because when you sign a reservation agreement you’ll also be asked for a small refundable deposit, anywhere from 5 to 10 thousand dollars, that will be kept in an escrow account.
Purchase and Sale
After you’ve done your due diligence and decided your purchase is a go, you’ll be asked to sign a purchase and sale agreement. These are very similar to purchase and sale agreements in the states. Along with the agreement, you’ll now have to pay for your property. If the property is already built then the remainder of the money is due in full. If it’s not yet under construction, you’ll have to pay up to the amount of the deposit, usually 25%. If it’s under construction, you’ll have to make payments up to the current stage payment. (I explain stage payments below)
I’ll be straight with you here, financing is a challenge in Belize. It does exist, but in all honesty it’s very difficult to procure. It’s also expensive. Banks will require you to put down at least 40% of the purchase price and the interest rates on the loan will be somewhere in the neighborhood of 8-10%. A better option to Belizean financing is to refinance your home in the states or take out a second mortgage. The rates will be much friendlier and the process much simpler. Of course, if you can do it, the best way to purchase anything is by using cold, hard cash.
Stage payments are put in place when the property you wish to buy isn’t yet built. They simply mean that at each important “stage” of construction more money is due until the entire property is built and paid for. Stage payments are standard in Belize and protect you by ensuring that construction milestones are met before you put in more money.
Property in Belize is freehold which means that you aren’t just owning the property while leasing the land the property sits on, you own both.
Capital Gains and Inheritance Tax
Belize is extremely tax friendly and as far as capital gains and inheritance tax go, there are none. If you decide to sell your property after a few years and end up making a profit on it, you don’t have to share that gain with the government. You can also keep the property and pass it on to your family members entirely tax free.
At the close of escrow, buyers are required to pay a stamp duty transfer tax which officially allows transfer of the title. The first $10,000 of the purchase is exempt from the tax with the remainder taxed at 8%.
As with any important purchase, you’re going to need a lawyer to make sure everyone has dotted the i’s and crossed the t’s. In Belize this costs somewhere around 1-2% of the purchase price.
Now that you’ve got the basics, it’s time to go out and confidently buy your dream.
There are many beautiful resorts in Belize, but since this is the Palm Reef website and not entirely unbiased, might I recommend you take a look at Palm Reef? Our high end, luxury condos have some of the best views in the Caribbean and we can help you through the buying process with ease.
Brett Renee Stone is a managing partner and director of communications for Palm Reef Resort.