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Last Updated: Nov 24, 2010




There’s been strong growth in tourism to Aruba in 2010, with a 6.2% increase in arrivals in the first quarter of the year compared to the same period in 2009, driven mainly by arrivals from the US, the island’s main trading partner and top visitor market.

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
Last Updated: Jan 20, 2012



The average price per square metre of houses in Aruba has dropped from US$1,676 last year to US$1,582 this year. Currently, the cost of a 150 square metre house located in the upscale neighborhoods of Aruba such as Bakval, is about US$226,000, whereas last year, it was about US$290,000.

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.

Read Rental Yields  »



TAXES AND COSTS
Last Updated: Apr 24, 2012



Rental Income: Net rental income is taxed at progressive rates, from 7% to 58.95%.

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.

Read Taxes and Costs  »



BUYING GUIDE
Last Updated: Dec 11, 2012



Round-trip transaction costs are around 9% to 12% of the property's value, with the biggest cost being the agent’s commission, at around 5% the property value. Other costs are the transfer tax (3% - 6%) and notary fee (1%), usually paid by the buyer.

Read Buying Guide  »



LANDLORD AND TENANT
Last Updated: Jun 06, 2006



Aruba beachfront propertiesRent: Rent and rent increases can be freely agreed (in practice), though in law, the Rent Assessment Advisory Committee (the Committee) is responsible for determining the rent, approving rent increase, tenant evictions, and contract termination.

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.

Read Landlord and Tenant  »



ECONOMIC GROWTH
Last Updated: Nov 24, 2010


Tourism pushes Aruban economy

Aruba vacation tourist spotsAruba is famous for its pleasant and very dry climate. Its flattish landscape of aloe and cactus is unique in the Caribbean.

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

Aruba tourist arrival graphThe 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.






  • Low transaction costs
  • Pro-tenant rental market
  • Taxes can be very high
  • Generally low yields
  • Tourism dependent economy
RESIDENTIAL PROPERTY FACTS
Price (sq.m): $1,455 For a 120 sq. m. property, usually an apartment.
Rental Yield: 7.32% For a 120 sq. m. property, usually an apartment.
Rent/month: $1,774 For a 120 sq. m. property.
Income Tax: 3.11% Assumptions: Owners are a non-resident couple drawing US$ / €1,500 per month in rent, with no other local income.
Roundtrip Cost: 9.00% The total cost of buying and then reselling an apartment. Includes:

* all transaction taxes and charges:
* lawyers' and notaries' fees
* agents' fees

Assumptions: The buyers are non-resident foreigners. The apartment cost US$250,00 / €250,000.
Cap Gains Tax: n.a. Assumptions: The property was bought for US$250,000 / €250,000, and sold 10 years later, after a 100% appreciation.
Landlord and Tenant Law: Pro-Tenant Rating is based on a detailed study of each country’s law and practice.


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