Tourism from Latin America is also growing, with a significant increase of visitors from Brazil, according to Centrale Bank Van Aruba. Tourism declined in 2008 and 2009, as the recession hit the US, and arrivals from Venezuela, Aruba’s second largest source of visitors, also dropped.
Aruba’s economy is still below pre-crisis levels. The Valero oil refinery, an important source of earnings and employment, was shut down in July 2009. Unemployment increased, construction declined, and consumer demand fell, leading to a sharp contraction in the GDP.
Construction activities peaked in 2006, but the island now awaits the completion of the Ritz-Carlton Hotel in Palm Beach, where Aruba’s finest beaches are located. The 320-room oceanfront luxury resort, set to open in 2012, is expected to spur other investments and attract more visitors to the island.
There are no official data such as average house prices per sq. m. and rental prices released in Aruba.
Analysis of Aruba Residential Property Market »
Rental yields remain moderate to good, although slightly lower at 6.19% now, compared to an average of 6.67% last year.
Three-bedroom houses showed the highest rental return at 7.32%. Houses with more than four bedrooms earn a moderate 5.06% rental return.
Capital Gains: Capital gains realized from selling real estate property are taxed at the progressive income tax rates.
Inheritance: Inheritance of spouse and children are subject to inheritance tax from 2% to 6%. Nonresidents inheriting Aruban property are liable to pay special property transfer tax levied at 8% on the property value.
Residents: Residents are taxed on their worldwide income at progressive rates. Residents are entitled to various deductions and allowances.
Tenant Security: Tenants can become ‘embedded’ in properties. The landlord needs permission from the Committee to end indefinite period tenancy contracts leases. Definite period tenancy contracts cannot be terminated even after the termination date, if the tenant wishes to extend.
The south and west coasts have miles of pristine white beaches and many picturesque hidden bays. Aruba is outside the hurricane belt, and cooled by constant trade winds.
Aruba’s economy is primarily based on tourism, oil refining, and offshore financial services. Stay-over visits saw a downturn 2001-2003 due to 9-11, then a revival in 2004, with total number of stay-over visitors increasing around 13.4% from 2003 to 2004
The island has suffered adverse publicity from the Nathalee Holloway case, which involved the disappearance of an attractive Alabamian 19-year old on May 30, 2005, during a high school graduation celebration trip. Several suspects were arrested, questioned, and later released, but no-one has been charged. Natalie’s disappearance and the arrests received an extraordinary amount of popular coverage on Fox News, CBS, and other TV networks, generating strong US sentiment against the island.
This has impacted Aruba’s tourist trade, and residential property.