Five things to know when purchasing property in the Cayman Islands

Ask anyone how long they have lived in the Cayman Islands and you will often hear a similar reply: “I initially came here to work for a year…that was 20 years ago.”

Tourists are equally inclined to start imagining living in the Cayman Islands soon after they arrive. It’s common to see visitors asking hotel concierges on their third or fourth day of vacation to introduce a realtor or provide information on properties for sale. The Islands have a way of capturing people’s hearts, and one trip is all it takes before Cayman is a place they want to call home, whether it be for vacations, a base for a globally mobile lifestyle or a permanent fulltime residence.

Acquiring a property abroad can be a daunting exercise, even for experienced international property investors. Fortunately, property conveyancing in Cayman is a straightforward process thanks to expert professional service providers in legal, financial and real estate professions.

Here are five questions often asked by first-time buyers.

Are there any restrictions on overseas persons owning and renting residential real estate in the Cayman Islands?

There are generally no restrictions on foreign ownership of property, and alien landholding licenses are not required. In addition, there is no requirement to develop lands within a specified period of time. For investment-motivated purchasers there may be certain local licenses needed to rent a property. It is recommended to get professional advice prior to acquiring the property so that licensing can be considered in the overall investment decision.

3

What is stamp duty? How and when is this assessed?

Stamp duty is a one-time tax (land transfer fee) that is paid to the Cayman Islands Government, usually by the purchaser. On real estate transactions, stamp duty is payable at a prescribed rate — usually 7.5% of the market value of a property or the price paid, whichever is higher. Stamp duty is assessed when the transfer of property documents is presented for registration at the Cayman Islands Land Registry. The Cayman Islands Government will then assess the market value of the property to ensure that it is receiving the correct amount of stamp duty.

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Aside from the sales price, what other costs are associated with conveying property in the Cayman Islands?

Purchasers will pay stamp tax, which is 7.5% of the purchase price (excluding chattels) for most properties. Vendors will pay commission to the realtor that sells the property – the commission rate is normally 5% (4% and 6% on some properties). Other costs may include home inspections, valuations (e.g. for mortgages), legal conveyancing and stamp tax on mortgages. Many financial institutions require mortgage clients to purchase life insurance and property insurance.

Is title insurance required?

The Cayman Islands operates under the Torrens system of land registration. The registry records all title records and the details of all land ownership information in the Cayman Islands, together with a Registry Map which indicates the boundaries of each individually owned parcel of land.

There is a “statutory guarantee” of title whereby the Government of the Cayman Islands will pay compensation to any person who suffers a loss due to an error in the Land Register which cannot be rectified. On this basis, obtaining title insurance is generally considered unnecessary in the Cayman Islands.

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Can you obtain residency by investment (RBI) through real estate in the Cayman Islands?

The Cayman Islands has long been favoured by foreign real estate investors for several reasons; not only are the islands tax neutral and home to a world-class financial centre, but the modern infrastructure, excellent airlift, glorious year-round weather and low crime rates provide a quality of life higher than many other islands in the region. While Cayman does not offer a citizenship-by-investment programme, there are a few residency options for those looking to relocate to this British Overseas Territory. Contact a sales specialist today to learn more. The ease of conveying property with the support of professional advisors and an efficient government process is just one reason why the Cayman Islands is one of the premier Caribbean nations for owning vacation, investment and full-time residential properties.

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