Introductory Buyers Guide
Regency Realty-The Exclusive Affiliates of Christie’s International Real Estate Turks and Caicos Islands 1
Welcome “Nights and days came and passed And summer and winter and the rain. And it was good to be a little Island. A part of the world and a world of its own All surrounded by the bright blue sea.” ― Margaret Wise Brown, The Little Island
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Intro-Turks and Caicos
General Overview THE TURKS AND CAICOS ISLANDS
• British Overseas Territory • Tax free Jurisdiction • English Speaking • United Kingdom Common Law • Easily accessible from the United States and Europe • Capital: Grand Turk (Cockburn Town) • Population: 51,430 (July 2016 est.) • Area: 948 sq km • GDP: $632 million (2007 est.) • Currency: the US dollar is used • Time difference: UTC-5
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General Overview ContThe Turks and Caicos Islands ("TCI") are a group of 30 islands in the North Atlantic, 575 miles south- east of Miami, with the Bahamas some 30 miles to the north-west. The total land area is about 430 sq. km. There are 6 inhabited islands (Grand Turk, South Caicos, Middle Caicos, North Caicos, Providenciales and Salt Cay. The estimated population of the TCI is about 32,000. The population is mainly of African descent. The capital is Grand Turk. The population speaks English and the official language is also English.! It is believed that the islands were first discovered by Columbus on his first voyage in 1492. Officially it is claimed that the islands were visited by Spanish seamen in 1512, at a time when they were occupied by Arawak Indians. However, they remained practically uninhabited until British settlers from Bermuda founded the salt panning plants there in 1678. The British secured the islands in 1766 against Spanish and French claims.! From 1874-1962 the islands were a dependency of Jamaica. In 1962 Jamaica withdrew from the Federation of West Indies and the islands, which were then annexed by the Bahamas. In 1973 they became a self-governing British Crown Protectorate, and Britain maintains responsibility for defense and foreign affairs. The islands are ruled by a Governor appointed by Britain with an Advisory Council of 4 nominated members.! The Government consists of a Lower and Upper House. The Lower House is the Legislative Council with 17 seats. The Upper House (the Executive Council) consists of a Chief Minister, 4 members appointed by the Governor and 3 ex-officio members, including the Governor.! The legal system is based on English Common Law with local statutory modifications. Local legal services are excellent.!
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Status Of The Islands The Turks and Caicos Islands are a British Overseas Territory. As a British territory, its sovereign is Queen Elizabeth II of the United Kingdom, represented by a governor appointed by the monarch, on the advice of the Foreign Office. The United Nations Special Committee on Decolonization includes the territory on the United Nations list of Non-Self-Governing Territories. With the election of the territory's first Chief Minister, J.A.G.S. McCartney, the islands adopted a constitution on 30 August 1976, which is Constitution Day, the national holiday. The judicial branch of government is headed by a Supreme Court; appeals are heard by the Court of Appeal and final appeals by the United Kingdom's Judicial Committee of the Privy Council. There are three justices of the Supreme Court, a Chief Justice and two others. The Court of Appeal consists of a president and at least two justices of appeal. Magistrates' Courts are the lower courts and appeals from Magistrates' Courts are sent to the Supreme Court. As of September 2014, the Chief Justice is Justice Margaret Ramsay-Hale.
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Demographics Eight of the thirty islands in the territory are inhabited, with a total population estimated from preliminary results of the 2012-01-25 Census (released on 12 August 2012) of 31,458 inhabitants, an increase of 58.2% from the population of 19,886 reported in the 2001 census. One-third of the population is under 15 years old, and only 4% are 65 or older. In 2000 the population was growing at a rate of 3.55% per year. The infant mortality rate was 18.66 deaths per 1,000 live births and the life expectancy at birth was 73.28 years (71.15 years for males, 75.51 years for females). The total fertility rate was 3.25 children born per woman. The annual population growth rate is 2.82%. The adult population is composed of 57.5% immigrants ("non-belongers"). The CIA World Factbook describes the islanders' ethnicity as African 87%, European 7.9%, Mixed 2.5.%, East Indian 1.3% and Other 0.7%.
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Language The official language of the islands is English and the population also speaks Turks and Caicos Islands Creole which is similar to Bahamian Creole. Due to its close proximity to Cuba and Hispaniola, large Haitian Creole and Spanish-speaking communities have developed in the territory due to immigration, from Creole-speaking Haiti and from Spanish-speaking Cuba and Dominican Republic.
Religion Main article: Religion in the Turks and Caicos Islands 72.8% of the population of Turks and Caicos are Christian (Baptists 35.8%, Church of God 11.7%, Roman Catholics 11.4%, Anglicans 10%, Methodists 9.3%, Seventh-Day Adventists 6%, Jehovah's Witnesses 1.8% and Others 14%).[55] Catholics are served by the Mission "Sui Iuris" for Turks and Caicos, which was erected in 1984 with territory taken from the then Diocese of Nassau.
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Culture The Turks and Caicos Islands are most well known for ripsaw music. The islands are known for their annual Music and Cultural Festival showcasing many local talents and other dynamic performances by many music celebrities from around the Caribbean and United States. Women continue traditional crafts of using straw to make baskets and hats on the larger Caicos islands. It is possible that this continued tradition is related to the liberated Africans who joined the population directly from Africa in the 1830s and 1841 from shipwrecked slavers; they brought cultural craft skills with them. The island's most popular sports are fishing, sailing, football (soccer) and cricket (which is the national sport). Turks and Caicos cuisine is based primarily around seafood,
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Citizenship Because the Turks and Caicos is a British Overseas Territory and not an independent country, they, at one time, could not confer citizenship. Instead, people with close ties to Britain's Overseas Territories all held the same nationality: British Overseas Territories Citizen (BOTC) as defined by the British Nationality Act 1981 and subsequent amendments. BOTC, however, does not confer any right to live in any British Overseas Territory, including the territory from which it is derived. Instead, the rights normally associated with citizenship derive from what is called Belonger status and island natives or descendants from natives are said to be Belongers. In 2002, the British Overseas Territories Act restored full British citizenship status to all citizens of British Overseas Territories, including the Turks and Caicos. See British Overseas Territories Citizen Access to British citizenship.
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Education System Public Education is supported by taxation, and is mandatory for children aged five to sixteen. Primary education lasts for six years and secondary education lasts for five years. In the 1990s, the island nation launched the Primary In-Service Teacher Education Project (PINSTEP) in an effort to increase the skills of its primary school teachers, nearly one-quarter of whom were unqualified. Turks and Caicos also worked to refurbish its primary schools, reduce textbook costs, and increase equipment and supplies given to schools. For example, in September 1993, each primary school was given enough books to allow teachers to establish in-class libraries. In 2001, the student–teacher ratio at the primary level was roughly 15:1. The Turks and Caicos Islands Community College offers free higher education to students who have successfully completed their secondary education. The community college also oversees an adult literacy program. The Ministry of Health, Education, Youth, Sports, and Women's Affairs oversees education in Turks and Caicos. Once a student completes their education at The Turks and Caicos Islands Community College, they are allowed to further their education at a university in The United States, Canada, or the United Kingdom for free. They have to commit to working in The Turks and Caicos.
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Health System The Turks and Caicos established a National Health System in 2010. Residents contribute to a National Health Insurance Plan through salary deduction and nominal user fees. Majority of care is provided by the privatepublic-partnership hospitals in Providenciales and Grand Turk. In addition there are a number of government clinics and private clinics. The hospital opened in 2010 is administered by Interhealth Canada and has been accredited by Accreditation Canada in 2012 and 2015. A state-of-the-art hospital was built on the main island of Providenciales in 2010 in conjunction with the Grand Turk Hospital servicing the nations Capital. This complex includes operating theatres, CT and MRI scanners, dialysis centers, maternity services, and other departments. Over thirty physicians are employed between the Providenciales and Grand Turk hospitals, and international specialists and consultants regularly visit.
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Economy The Turks and Caicos Islands are a stable financial zone for offshore business, with company, insurance and banking systems that have developed rapidly since 1989-1990. The infrastructure is very highly developed. There is a state-of-the-art telecommunications system, including fax, telex and direct-dial telephone communications, as well as international courier services. There are frequent flights to neighbouring islands and the US and Canada.! The economy of the TCI is based tourism, the off-Shore and Real Estate Industry.! The currency used on the TCI is the US Dollar. There are no currency exchange controls for non- residents.
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Tourism The United States was the leading source of tourists in 1996, accounting for more than half of the 87,000 visitors; another major source of tourists is Canada. Tourist arrivals had risen to 264,887 in 2007 and to 351,498 by 2009. In 2010, a total of 245 cruise ships arrived at the Grand Turk Cruise Terminal, carrying a total of 617,863 visitors.The government is pursuing a two-pronged strategy to increase tourism. Upscale resorts are aimed at the wealthy, while a large new cruise ship port and recreation centre has been built for the masses visiting Grand Turk. Turks and Caicos Islands has one of the longest coral reefs in the world and the world's only conch farm.The French vacation village company of Club Mediterannee (Club Med) has an all-inclusive adult resort called 'Turkoise' on one of the main islands.
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Tourism Continued Several Hollywood stars have built homes in the Turks and Caicos, including Dick Clark and Bruce Willis. Ben Affleck and Jennifer Garner married on Parrot Cay in 2005. Actress Eva Longoria and her ex-husband Tony Parker went to the islands for their honeymoon in July 2007 and High School Musical actors Zac Efron and Vanessa Hudgens went for a vacation there. In 2013 Hollywood writer/director Rob Margolies and actress Kristen Ruhlin vacationed here. Musician Nile Rodgers has a vacation home on the island. To boost tourism during the Caribbean low season of late summer, since 2003 the Turks and Caicos Tourist Board have organized and hosted an annual series of concerts during this season called the Turks & Caicos Music and Cultural Festival. Held in a temporary bandshell at The Turtle Cove Marina in The Bight on Providenciales, this festival lasts about a week and has featured several notable international recording artists, such as Lionel Richie, LL Cool J, Anita Baker, Billy Ocean Alicia Keys, John Legend, Kenny Rogers, Michael Bolton, Ludacris, Chaka Khan, and Boyz II Men. More than 10,000 people attend annually.
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Transportation Providenciales International Airport is the main entry point for the Turks and Caicos Islands. Altogether, there are seven airports, located on each of the inhabited islands. Five have paved runways (three of which are approximately 2,000 m (6,600 ft) long and one is approximately 1,000 m (3,300 ft) long, and the remaining two have unpaved runways (one of which is approximately 1,000 m (3,300 ft)s long and the other is significantly shorter). The islands have 121 kilometers of highway, 24 km paved and 97 km (60 mi) unpaved. Like the United States Virgin Islands and British Virgin Islands, the Turks and Caicos Islands drive on the left, but use left-hand-drive vehicles that are imported from the United States. The territory's main international ports and harbors are on Grand Turk and Providenciales. The islands have no significant railways. In the early twentieth century East Caicos operated a horse-drawn railway to transport Sisal from the plantation to the port. The 14-kilometre route was removed after sisal trading ceased. The island of Providenciales is also home to two private airports and are reported to be some top the busiest in the Caribbean . During the season both are at maximum capacity with an impressive line up of private jets from across the world.
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Media Mobile phone service is provided by Cable & Wireless Worldwide, using GSM 850 and TDMA, and Digicel, using GSM 900 and 1900. Cable & Wireless provides CDMA mobile phone service in Providenciales and Grand Turk. The system is connected to the mainland by two submarine cables and an Intelsat earth station. There were three AM radio stations (one inactive) and six FM stations (no shortwave) in 1998. The most popular station is Power 92.5 FM which plays Top 100 hits. Over 8000 radio receivers are owned across the territory. West Indies Video (WIV) has been the sole cable television provider for the Turks and Caicos Islands for over two decades and WIV4 (a subsidiary of WIV) has been the only broadcast station in the islands for over 15 years; broadcasts from the Bahamas can also be received. The territory has two internet service providers and its country code top level domain (ccTLD) is ".tc". Amateur radio callsigns begin with "VP5" and visiting operators frequently work from the islands.
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Climate The Turks and Caicos Islands feature a relatively dry and sunny marine tropical climate with relatively consistent temperatures throughout the course of the year. Summertime temperatures rarely exceed 33 °C (91 °F) and winter nighttime temperatures rarely fall below 18 °C (64 °F). Over the course of a year, the temperature typically varies from 22°C to 32°C and is rarely below 20°C or above 33°C.The warm season lasts from June 9 to September 30 with an average daily high temperature above 31°C. The hottest day of the year is July 24, with an average high of 32°C and low of 27°C. The cold season lasts from December 3 to January 22 with an average daily high temperature below 27°C. The coldest day of the year is March 7, with an average low of 22°C and high of 27°C.
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Biodiversity The Turks and Caicos Islands are a biodiversity hotspot. The islands have many endemic species and others of international importance, due to the conditions created by the oldest established salt-pan development in the Caribbean. The variety of species includes a number of endemic species of lizards, snakes, insects and plants, and marine organisms; in addition to being an important breeding area for seabirds. The UK and Turks and Caicos Islands Governments have joint responsibility for the conservation and preservation to meet obligations under international environmental conventions. Due to this significance, the islands are on the United Kingdom's tentative list for future UNESCO World Heritage Sites. Angel Fish in the Princess Alexandra Land and Sea National Park, Providenciales.
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Market Overview
The Turks and Caicos Islands are an off-shore luxury destination that caters to those seeking a vacation destination with investment potential. The islands of the Turks and Caicos are certainly at the beginning of their life-cycle, and therefore offer a wide variety of opportunities that can’t be found in more well know Caribbean Islands such as the Bahamas, Barbados, St.Barths, St. Lucia, Trinidad and Tobago etc. Our real estate market caters to off-shore investors where 85 percent come from North America, with the remainder from Europe and Central/ South America. Given the islands location and close proximity to the United Sates it has become extremely popular and very desirable. To leave your snowbound home in the morning and by mid afternoon be relaxing on the beach with a cocktail in-hand s priceless !! The Turks and Caicos also offers another key element that is of extreme importance to many clients, and that is the safety and security of their investment. Being a British Overseas Territory, real estate purchases are guaranteed by the British Crown, leaving no question in their mind that their investment is protected by a well established system that
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Market Pulse According to many in the industry , the Turks and Caicos Islands are moving toward what is predicted to be an extremely positive 5 year cycle. Travel and Tourism remain extremely strong, with continued recognition as being some of the Best Islands in the World, and as with Grace Bay, continued recognition as one of the Best Beaches in the World. The islands offer some of the most luxurious resorts found anywhere in the region, many of those lining the shores of Grace Bay, but others, such as the private Island of Parrot Cay and the Como Resort, or Pine Cay and the Meridian Club offer an entirely different luxury experience, whilst being surrounded by our golden sands and turquoise waters. This has brought attention of some of the worlds leading brands who now stake their claim in the Turks and Caicos Islands. Providing such renowned brands as The Ritz, with its new development on what is undoubtedly the most pristine stretch of Grace Bay Beach. The Andaz (Hyatt) has recently announced its development further west but also on Grace Bay. And Turks Cay, an extremely luxurious development that caters to the Mega-Yacht community. Whilst the islands are known for being a playground to the rich and famous, the evolution of the Turks and Caicos has now provided for a wide variety of properties that would fit most all pocketbooks and age demographics. With strategically located mini-developments just a couple minutes walk from Grace Bay, we are now seeing and entirely new breed of vacation property. We are also seeing our sister islands develop, such as South Caicos and the stunning Sailrock development that is creating an entirely exclusive luxury community.
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To close this section, it is clear that the Turks and Caicos Islands have become the place to be in the Caribbean, be it for lifestyle or investment. Our islands offer an unparalleled experience rarely found in todays world. Experiences and benefits that we simply couldn’t detail in this one simple guide. As such we offer you the opportunity to come and meet with us and explore our islands and let us help you find your piece of paradise.
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The Buying Process
How Much Does Real Estate Cost In The TCI ? Usually much less then it will cost in the future, given the current market predictions and growth. More and more investors are discovering the attractiveness as a vacation, investment, and retirement with tourism increases annually by 10% to 20% The number of real estate transactions and appreciation follow these numbers closely along with increased demand means rising prices. We have a wide selection of properties ranging from as little as $10,000 to as much as $75,000,000, making it very easy to find what you are looking for.
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The Buying Process Simplified 1) Make a short list of whatever suits your needs best and view each, either in person or remotely. 2) List al of the pros and cons for each to help determine the best property for you. 3) Make an offer on what you feel is the best market price for the property. Your Real Estate Professional will assist by providing valuable insight based on comparable sales to help you with this determination and construct the offer which is known as the Preliminary Agreement . 4) Once you have received acceptance on your offer by the seller, meet with a local attorney to discuss the upcoming process and ways you can hold the property. If you are in the Turks and Caicos but will not be making an offer before you leave, still meet with an attorney as they will be responsible for the final conveyance and will be receiving deposits and purchase funds. 5) Once your offer has been accepted you will be paying a 1% Reservation Bond within four days of the acceptance of the Preliminary Agreement. A further deposit of 9% will be due within four days of the execution of the Formal Purchase and Sales Agreement which will be drafted by the local attorneys and executed by each party. This constitutes a 10% deposit inclusive of the Reservation Bond. Regency-Christie’s International Real Estate Turks and Caicos Islands Buyers Guide - Turks and Caicos Islands
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The Buying Process Simplified 6) Once the deposit is with the attorneys, the seller’s attorney will prepare the Formal Sales and Purchase Agreement that will be executed by both buyer and seller. At this point the deposit is given to the sellers attorney. The balance of the purchase funds are then transferred to the island and placed in escrow until the completion date. 7) On the date of completion your attorney transfers to the sellers attorney the balance of funds in exchange for a Transfer Form signed by the seller transferring the property to you. 8) The sellers attorney holds the funds until your attorney registers the transfer with the Turks and Caicos Islands Land Registry. In the Turks and Caicos Islands the Government guarantees title so no title insurance is required. 9) The Seller typically pays the commission, the Purchaser pays the Stamp Duty and each party pays their own legal fees. 10) Within 30 days of the purchase your attorney will pay the required Stamp Duty on your real estate investment less any chattels. Regency-Christie’s International Real Estate Turks and Caicos Islands Buyers Guide - Turks and Caicos Islands
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Who Buys In The Turks and Caicos As noted earlier nearly 85 percent of buyers come from North America, with the majority of investors from New York, Chicago, Atlanta, Boston, Miami, Texas and California and Canada. All of these locations being feeder markets or gateway locations that fly directly to the Turks and Caicos Islands. The recent expansion of the international airport on Providenciales and direct flights from Toronto and Montreal have brought in more Canadian buyers, with efforts underway to attract more Brazilians and other South and Central Americans as well as to expand traffic from the United Kingdom and Europe.
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Buying Basics There are no specific laws or rules for foreigners buying real estate in the Turks and Caicos Islands, said Jonathan Katan, a lawyer and a partner at Miller Simons O’Sullivan in Grace Bay. Foreign buyers are treated “exactly the same as residents and Turks Islanders.” While the Turks and Caicos Islands have a secure registered land system, Mr. Katan said, “it is always advisable to consult an attorney to ensure that there are no issues with the property, advise on how title should be taken and to handle the registration and payment of stamp duty.” Additionally, because the registered land system does not utilize title insurance companies, “it will be the attorney who provides an opinion and comfort with respect to title.”
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Buying Basics-cont Once your property is selected, a real estate purchase involves the signing of a Purchase and Sale Agreement and payment of an initial deposit, usually 10% of the purchase price. The Realtor or the Seller’s Attorney holds the deposit in trust pending closing. The date for closing the transaction is fixed by agreement between parties. On closing, the transfer Document is handed over to the Buyer’s Attorney in exchange for the remainder of the purchase price. The Buyer’s Attorney delivers The Transfer Document with the Land Registry. The Registrar deletes the name of the Seller and inserts the Buyer as the new owner of the property. At the time of registration, the land value will be established by the sale price or Government appraisal for the collection of Stamp Duty. Individuals or Company Directors purchasing property sign an Agreement of Purchase and Sale, an approved document filed with the Registrar within one month of the date of execution. The Purchase and Sale Agreement, describes the property, defines price and terms, and lists other conditions particular to the transaction. Facsimile signatures are acceptable and it is not necessary for either party to be present for closing as your Attorney can represent you. Transfer Forms are completed by Buyer and Seller and witnessed by a Notary or Justice of the Peace in the Turks & Caicos Islands or in their country of residence. Original signatures are required along with complete proper names, as they will appear in the Register.
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Buying Basics-cont The Sales and Purchase Agreement This is the primary document required to complete the transfer of property. Original Land Certificates accompany the Transfer Forms and are presented to the Land Registry. The Registrar of Land handles Land registration in the Turks & Caicos Island, Turks Island Government Registration of Land Title is final and the Title is absolute. Deposits and proceeds from sale are normally held in trust until the transfer is registered. Once registration takes place, proceeds of the sale are released to the Seller and real estate commission to the Agent. A Land Certificate is issued as evidence of the title. Normally the Land Certificate will remain in the Land Registry. A copy of the Land Register Certificate will show current ownership and any liens or charges on a property. In cases where the full purchase price is not paid, a Charge of Mortgage is executed, the title of the land is transferred, but the Charges shows in the Register as an encumbrance against the title to secure payment of the balance owed. Removal of the Charges must be made by the person to whom the money is payable. NOTE: Title is guaranteed by the Crown, United Kingdom.
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Annual Taxation & Fees There are no direct taxes such as income tax, corporation tax, capital gains tax, profit tax, gift or inheritance tax. An Exempt TCI company is exempt from all taxation for a period of 20 years from its date of incorporation, both on its own operations and on the Company's shares.! The annual fee of US$300 must be paid in January.! There is no requirement to file accounts or a detailed annual return. Each company must file a short statement indicating that it has traded mainly outside the islands and that the company has complied with various statutory requirements.!
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Permanent Residency Permanent Residence status is an immigration status in the Islands that allows the person named on a Permanent Residence Certificate (PRC) to reside without restrictions on the length of time he or she can remain in the islands, and in some instances to work. The Turks and Caicos Islands Government and its people welcomes individuals who bring benefits to the islands and who are willing to assimilate and identify as fellow residents espousing to a common purpose of protecting our environment, preserving our culture, championing peace, safety, security and civil liberties, and developing a prosperous and growing economy that is undergirded by our values and beliefs.
Permanent Residency is granted it you have made one of the following investments Not less than $300,000 in the actual construction, purchase or renovation of a distressed property as a home in the island of Grand Turk, salt Cay, South Caicos, Middle Caicos or North Caicos , OR Not less than $1,000,000 in the actual construction, purchase or renovation of a distressed property as a home in the islands other than Grand Turk, salt Cay, South Caicos, Middle Caicos or North Caicos
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Current Stamp Duty October 2018
As noted in the Buying Basics the Turks and Caicos Islands have no annual Taxes such as property tax,Income Tax,, Capital Gains Tax or Inheritance Tax. However, a ‘one time’ Stamp Duty is levied on the purchase of all real estate regardless of how many times it is traded. The purchaser of any property should include this one time fee in their calculations. Stamp Duty is based on a sliding scale of value and does include different rates based on the particular island.
The information provided on this page is true as of the day of writing. Please consult your agent for current Stamp Duty Rates
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In Depth
In-Depth In the following we hope to provide clients, and prospective clients with information on the transfer of title to land in the Turks & Caicos Islands along with information on holding title to property through trusts or a property holding company. This also briefly explains some of the benefits of land ownership in the Turks & Caicos Islands. It is in no way intended to replace legal representation and as such will not be held responsible for any misinterpretation
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Transfer of Title to Land in the TCI Land in the Turks and Caicos Islands (“TCI”) is registered under the Registered Land Ordinance, a piece of legislation that provides for a Torrens Registered Land system. The significance of a Torrens Registered Land system is that one can rely on the Register (which is maintained at Her Majesty’s Land Registry in Grand Turk) for details of most interests effecting property. It is therefore not necessary to investigate prior title. One can rely on the entries on the Register to demonstrate, for instance, the identity of the owner of property and any defects that encumber a property. The system is identical to the one in England & Wales save that there is no residual unregistered land. There is no restriction on the holding of land in the TCI, save if land or developed property is to be held by a company the company must be a Turks & Caicos Islands Ordinary company. A foreign company therefore cannot directly hold title to local property.
There is no restriction, however, on a foreign individual holding land, and there is no restriction on a foreign individual holding the shares of a Turks & Caicos Islands Company, which might, in turn, hold land. There is also no prohibition on a foreign company holding the shares of a TCI company that holds land. A brief overview of the various options follow:
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Property Held In The Name Of Owners One option is to take title to property in a buyer’s name, the buyer and his partner’s names or in the name of the buyer and one of his children: either as Joint Tenants or Tenants in Common. The essential difference between these methods of holding property is that under a joint tenancy property automatically passes to the surviving joint tenant on the death of one of the owners. The nature of the ownership is that the parties each own the entirety of the property and on the death of one of the owners there is no need for probate or other legal formality save the lodgement of a simple form of application in the Land Registry to delete the deceased person’s name, such death being evidenced by certified copy of a Death Certificate Where property is held under a Tenancy in Common, on the death of one of the owners that person’s share of the property devolves to his estate and is distributed in accordance with his/her will or under intestacy rules. The nature of this type of ownership is that each person has an independent divisible interest in the relevant property. Married couples or couples living as husband and wife usually hold property as joint tenants.
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Property Held by a Property Holding Company A second option is to hold property in the name of a company. There are often great advantages in using an offshore holding company for the purpose of holding overseas property. Such advantages may include avoidance of inheritance tax, avoidance of capital gains tax, ease of sale, which is achieved by transferring the shares in the company rather than transferring the property owned by the company, privacy and reduction of a property’s purchase costs. The specific benefits of establishing a company to take title to a property, however, will largely depend on an individual purchaser’s circumstances and needs. Privacy is obtained because the shares of the property holding company can be held by nominee shareholders. In addition, nominee directors and a nominee secretary can also be appointed to a property holding company’s Board of Directors. The consequence of this, combined with the obligations under Turks & Caicos Islands' confidentiality laws, is that the buyer (or buyers) is provided with privacy as to his ownership of property. Another advantage of a company owning property is that the beneficial interest in the property can be transferred by a simple transfer of the shares in the company. This process avoids, for the purchaser, the potential lengthy delays in having title at the Land Registry transferred into his, or her, name.
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Property Held by a Property Holding Company-cont Another advantage of a company owning property is that the beneficial interest in the property can be transferred by a simple transfer of the shares in the company. This process avoids, for the purchaser, the potential lengthy delays in having title at the Land Registry transferred into his, or her, name. A company should also provide protection from liability flowing from the property in the event, for example, of insurance being inadequate to cover loss or damage to an invitee or in the event of such insurance being voided for any reason. Certain purchasers may find it convenient to have title to the property placed in a company so that any income earned will be attributable to the company and not to the individual directly. Thereafter, the company may, in due course, pay dividends to the individual shareholders if there are any profits left over after expenses, management fees, etc. Finally, registering title in a company may afford the purchaser the facility of structuring the company such as to provide for estate planning or inter vivos gifts between himself and his blood relatives as deemed appropriate. (Note that under current Turks and Caicos Islands Stamp Duty Laws it is possible for a parent to transfer property to his/her child/children free of stamp duty. Transfers between spouses are also currently free of stamp duty. Note also that stamp duty is payable in respect of transfers of shares in land holding companies as well in situations where land and/or condo itself is sold.)
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Property Held by a Property Holding Company-cont Note that the shares of a company which is holding land may be held directly by an individual or by a group of individuals or they may, as is quite common in the Turks and Caicos Islands, be held by local management companies in trust for the beneficial owners. Again, this can afford the purchaser a certain degree of anonymity and facility to deal with the ownership of the land both during his lifetime and after the beneficial owner’s death. The share may be held on what is known as a bearer trust declaration: a simple form of declaration whereby the nominee management company simply acknowledges that while it is registered as holding the share, it is, in fact, holding the share as the trustee for the beneficial owner or owners. In such situations it is common, for example, for a purchaser to provide that the shares shall be held in trust for the husband and wife or for the lifetime of the survivor partner and thereafter to their children in equal shares. This arrangement avoids probate being required upon the death of the first deceased partner and also the surviving partner (also discussed below). Another option for a prospective purchaser is that the property be purchased directly in the name of a trust, or more correctly the trustee. For example, the title to the property could be taken in the name of a trustee under the declaration of trust as described above. There are additional benefits where one owns a property holding company through a trust. Our fees for the establishment of a property holding company, set out below, is generally reduced by 35% when the establishment of the company is part of a seamless property transaction.
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Owning a Property Holding Company Through Trust. The beneficial owner of an offshore property holding company will naturally have a desire in the event of his or her death to transmit assets to the next generation (or, possibly, a charity) in an efficient and discreet fashion. Whilst an offshore company provides anonymity for the eventual ownership of property and removes that property from the view of other potential claimants, technically, it creates other assets for the estate, namely the shares in the offshore company itself. Generally speaking upon death in respect of shares held in one’s own name, or even through nominee shareholders, probate will have to be obtained before the shares can be passed on to one’s heirs. As a result, there might be exposure to inheritance tax in one’s country of domicile and/or the country in which particular assets are situated. Further, obtaining probate invites publicity and the attention of tax authorities and generally involves legal and/or accounting fees. Consequently, the shares in the company can be held under a full-blown discretionary trust deed. This is a trust document that basically sets forth a discretionary trust arrangement whereby beneficiaries may be added to or taken away from the trust in accordance with the terms of the trust deed itself.
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Owning a Property Holding Company Through Trust-cont The trust deed in such circumstances will provide that there will be a protector to the trust. The protector is something akin to the trust’s best friend, and has the right of veto in respect of certain trustee activities such as, for example, adding or taking away from the list of beneficiaries or making distributions to the beneficiaries from time to time. It is possible, therefore, to have a discretionary trust arrangement whereby no tax domicile individual is named as beneficiary at the outset and, thus, effectively seek to postpone taxation in the hands of such beneficiary. Care must be had, however, in respect of all these trust arrangements. (Please note that we are not American, Canadian, or English tax advisors and clients are advised to seek and obtain professional tax advice in respect of any particular method of acquisition or holding property.) If the shares of the company are placed into a suitably arranged discretionary trust then certain advantages may accrue: 1. No inheritance tax would be payable upon the death of the beneficial owner of the company. 2. There will be no need to bequeath assets by will and therefore no need for probate to be obtained in order for chosen heirs to have the benefit of those assets, so that one avoids the attendant cost and delays of probate.
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Owning a Property Holding Company Through Trust-cont 3. Effective asset protection may be secured against unknown future creditors. This can eliminate the anxiety of the professional or businessman who otherwise might live in fear of potential malpractice or negligence claims. It may be possible, however, for the courts in a beneficial owner’s home country to apply sufficient pressure to have the beneficial owners instruct offshore trustees to liquidate assets and repatriate the proceeds of sale of a property. 4. For the wealthy individual, a suitable trust structure allows disposition of assets on the basis of the owner’s choice rather than according to obligations which might be imposed under divorce laws, for example, or force heirship laws of certain countries. Considerable advantages may be obtained by placing shares of an offshore property holding company (and any other assets) into a suitably structured trust. We have enclosed our standard memorandum on Turks & Caicos Trusts that outlines some of the characteristics of Turks & Caicos trusts if you are interested in this option.
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Thank You We hope this has provided with some valuable insight into the simple process of buying and investing in the Turks and Caicos Islands. We understand that you will need a far deeper level of understanding before making your purchase, as such, we look forward to assisting you in the very near future. Kindest Regards, Robert Greenwood Snr. Broker and Partner Regency - Christie’s International Real Estate
Contact Robert Greenwood Senior Broker and Partner Member of the Christie’s Masters Circle Regency Realty-The Exclusive Affiliates of Christie’s International Real Estate One Season Plaza Suite 7-Grace Bay-Providenciales-Turks and Caicos Isl Direct cell: (649) 432-7653 US: (424) 239-0432 robert@tcibrokers.com www.THETurksandCaicos.com
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Luxury Real Estate Specialists 2018 Direct: 649. 432.7653 US: (424) 239-0432 One Season Plaza Suite 7, Grace Bay, Providenciales, Turks & Caicos Islands, BWI robert@tcibrokers.com www.THEturksandcaicos.com www.robertgreenwood.com Information contained within the document is intended for reference purposes. Consult with your local attorney for all matters pertaining to the purchase of real estate in the Turks and Caicos Islands
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