• Tue
  • Sep 23, 2014
  • Updated: 11:52pm

Read between the tax-friendly lines

PUBLISHED : Wednesday, 13 May, 2009, 12:00am
UPDATED : Wednesday, 13 May, 2009, 12:00am

Taxes, laws, languages and openness to foreign property buyers vary widely across the Caribbean.

Among the most tax friendly and welcoming to overseas buyers is the British colony of the Turks and Caicos Islands.

Foreigners can buy homes anywhere in the archipelago and there are no taxes on inheritance, capital gains, income or property.

The Global Property Guide considers the Turks and Caicos rental market pro-landlord. However, home transaction costs are high, averaging 19 per cent of the value of a property when buying and selling fees and charges are combined. They include legal fees, estate agents fees and notary fees. The situation is nearly identical in British colony the Cayman Islands.

The cost of buying and selling a property can touch 20.5 per cent but there are no taxes.

Foreigners are free to buy property in Barbados. They need permission from the Barbados Central Bank, but this is a formality.

There are no capital gains or inheritance taxes, but homeowners can pay 20 per cent income tax on rental income if they let their properties out.

Grenada is distinguished with having the Caribbean's highest combined buying and selling costs - equivalent to 43 per cent of a property's value the Global Property Guide reveals. But taxes are low.

The former British colony of St Lucia is more suitable for holiday homebuyers with money to spend than investors looking to make money because property purchase and sales costs are high - when buying and selling costs are added together they amount to 22 per cent of the value of the property.

Tax on rental income ranges from 10 per cent to 30 per cent. Foreigners need a Land Holding Licence to buy a home in St Lucia.

The legal systems in St Lucia, Grenada, Barbados, Cayman Islands and Turks and Caicos are based on English common law. English is widely spoken on these islands.

There are 10 projects in Cuba aimed at overseas buyers at various stages of planning and development. The only foreigners who cannot buy into these schemes are Americans because of their country's embargo. Little English or Chinese is spoken in Cuba, where the language is Spanish.

Caribbean rental returns are usually in single figures. Research from estate agency Cluttons Resorts shows gross yields on Barbados range from 6 per cent to 10 per cent.

They vary from 4 per cent to 6 per cent on St Lucia, and 4 per cent to 5 per cent on Grenada.

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