This is is one of the few countries in the world where foreigners enjoy the same right as nationals in land ownership and tenure – and land rights on the beach are not difficult to obtain.
A little-known benefit for those wishing to invest in Belize real estate is that there is no Capital Gains Tax. So if you purchase land, then sell it later at a good profit, you pay no Capital Gains Tax – all profits remain with you. Condos are a growing part of the real estate market and the country has modern legislation to handle this kind of property ownership based on the well recognized strata principle used in first world jurisdictions.
Real Estate – Some Basic Tips
Among the many attractions of Belize, none is more important to prospective retirees and expatriates than the relatively low cost of property and housing. For sure you can spend a lot of money on North American-style luxury developments. But you can also buy raw land at prices not seen in the U.S. since the 1960s and in some areas find a simple but pleasant rental house near the sea for under US$200. a month.
Like anywhere in the world, local Belize real estate scams do exist. Be wary of fast-talking real estate brokers, attorneys or anyone making a high pressure pitch. Do not be afraid to walk away or take your own deliberate time on any real estate transaction. Do not be swayed by who the real estate agent is. Most real estate agents in Belize are immigrants from North American who have literally taken over this business from Belizeans. You may understandably feel more comfortable with someone who looks like you, talks like you, and likely is from your own country.
It is recommended that you do all real estate land transactions through a licensed Belize real estate agent or an ethical Belize attorney-at-law. You need to ensure that a Title Search is conducted at the Government Land Registry and that the real estate that you are purchasing is free and clear of all liens, judgments and encumbrances. A title search done through a local attorney should not cost you more than U.S. $250.
One of the best ways to avoid being ripped off and get a better price, is to try and find the owner of the property you are interested in and cut out the middleman – the real estate agent. You can do this by scouting the property and talking to neighbors, maybe assisted by your taxi driver. Then hire a recommended Belize attorney or professional to arrange the title search, negotiate and purchase direct from the owner. As with any profession, there are crooked attorneys in Belize. And likewise, crooked real estate brokers, especially those in the luxury real estate segment. Ask around, get recommendations. Going rates for buying property through a local attorney are between 2 and 5 per cent of the property value. A real estate agent will charge more and is really working for the owner and himself to get a high price and commission.
The preferred way of owning real estate is through Title Free and Clear, either as an individual or through a corporate body. The property can be mortgaged with a bank or credit union. Titles Free and Clear, are issued for land and condominiums. Condominiums are purchased through a “Strata” title. Purchasing a property is pretty straightforward – the time for completion is usually 30 to 90 days.
Belize Strata Titles
The Strata Titles Registration Act, Chapter196, of the Laws of Belize governs the issuance of titles to condominiums in Belize. This act enables developers to construct condominium developments in Belize and to issue freehold title to each unit created in those strata developments.
Condominium structures in the Caribbean unlike that in big countries, tend not to be high rise, multistory towers used by nationals as their principal residence, but relatively modest two to four storey buildings, used by vacationing foreign residents. The concept is intended to incorporate the economic advantage of co-operative apartment living with economic advantages of home ownership. These strata developments are most commonly found in the island of San Pedro Ambergris Caye, Hopkins, and Placencia. Newer developments are seeing the rise of larger, luxury condos for the affluent. Some of the owners rent out their condos throughout the year to offset their mortgage to to make a good income.
Upon registration of a Strata Application, the titles of the various units are issued to the Developer in its name. Thereafter, every individual who purchases a unit automatically becomes a member of the Corporation (commonly known in the United States as the “Homeowner’s Association”). The Corporation is then invested with the power and duty to manage, maintain and upkeep the common areas of the Development pursuant to the articles in the registered By-Laws.
Real Estate Financing
Foreigners can obtain financing in U.S. dollars from local offshore banks. The maximum you can borrow is between 60 and 80% of the value of the property. Rates are about 8.5% to 12% interest. Most foreigners purchasing real estate pay cash from their own money, or borrow funds in their home countries where interest rates are lower. One advantage of financing your real estate purchase through a local bank is that the bank will have in-house attorneys to protect its loan portfolio.
Another option to purchase real estate is through owner financing where the seller provides part financing for the buyer, Conditions are flexible but an owner financed transaction usually sees the buyer putting down 30% cash and the owner finances the balance at rates of between 6 to 8 per cent over a five or ten year period. If you are buying property as an investment or future retirement home, you can hire a property management company to rent out your property when you are out of the country and pretty much have tenants pay for most of the cost of the purchase.
Property Taxes
Property taxes in Belize are very affordable. A house or condo worth U.S. $250,000 on Ambergris Caye for example attracts an annual property tax of under U.S. $375.00. Some wise investors choose to invest in real estate located in rural areas where taxes are ridiculously low.
How low? A Washington D.C. Library of Congress employee known locally as Four Dollar Charlie, recently shared with us his annual Belize property tax return. The annual property tax on his mansion hideout in Succotz – a village near Belize’s western border popular with American expats who do not mind having property in a Maya village as long as it is cheap – runs him U.S. $8.00 per year. No, we are not making this up – Eight U.S. Dollars a year.