Barbados: Overview
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Tourists come, tourists buy...
Barbados has long been one of the Caribbean’s main tourist destinations. And when people visit, they often like what they see, and buy.
“Property prices are up 20% on last year,” says Paul Alleyne of Jennifer Alleyne Ltd. “The West Coast has had tremendous increases, especially toward the beach. Properties that are bought by locals have not gone up by so much.”
Property prices are high. “We have a lot of product in the US$2M-US$6M price range,” says Alleyne. “Our lowest price now is just under US$1 million. There are only a few things in the US$1M-US$2M category, mostly one bedroom apartments.”
There are no restrictions on foreigners buying property. Non-residents need only obtain permission from the Barbados Central Bank before the purchase, as a formality.
RENTAL YIELDS
Expensive villas in Barbados
Property prices are extremely high in Barbados. Beachfront villas, with five bedrooms or more, sell for over $4M in St. James. Three-bedroom, and bigger, villas at priced from around $2M. Only two-bedroom villas are found below the $1M mark.
There is insufficient data on properties for rent. Most rentals are for short-term basis only.
TAXES AND COSTS
Rental income tax is high in Barbados
Rental Income: Rental income is taxed at 15%.
Capital Gains: There are no capital gains or inheritance taxes.
Residents: Residents are taxed on their worldwide income at progressive rates.
BUYING GUIDE
Barbados' roundtrip transaction costs are now moderate
With transfer taxes reduced from 7.5% to 2.5% in 2008, roundtrip transcation costs in Barbados are now moderate. Total costs for property sale and purchase range from 11% to 13.85%. The seller pays for a significant portion of the cost including the transfer tax, real estate agent's commission (5% + 15% VAT) and stamp duty (1%).
Buyer and seller pay for their own lawyer (legal fees are at 1.5% - 2%, plus 15% VAT).
LANDLORD AND TENANT
The law is neutral in Barbados
Rent: Rent and rent increases can be freely negotiated.
Tenant Eviction: The landlord cannot evict a tenant without a court order under any circumstances, even when the tenant has not paid the rent for six months. It takes an average of 92 days to evict a tenant.
ECONOMIC GROWTH
Catching up in tourism and development
Barbados (pop 280,000, GDP/cap US$12,500), a former British colony, is blessed with sandy beaches, limestone caverns and a warm climate tempered by trade winds.
The economy contracted in 2001 and 2002, with an annual GDP change of -2.6% and 0.5% respectively, mainly due to a decline in tourism. Barbados has since recovered. The GDP growth rate for 2005 was 3.1% and growth of 3.3% is forecast for 2006.
Inflation was consistently below 3% from 1998 to 2004, then shot up to 6% in 2005.
The country’s economy is highly dependent on tourism, making it vulnerable to the fluctuations in the world economy. The number of visitors increased 6.77% in 2003 to a total of 1,090,330, of which 531,215 stayed over.
RESIDENTIAL PROPERTY AROUND THE WORLD
Asia & Pacific
Bubble fears prompt foreign ownership limits in China
America & Caribbean
The slowdown of the U.S. housing market
Middle East and Africa
Bahrain is open to foreigners and sizzling hot
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| RESIDENTIAL PROPERTY FACTS | |
| Price (sq.m): $6,728 For a 200 sq. m. property, usually an apartment. | Rental Yield: n.a. |
| Rent/month: n.a. | Income Tax: 20.00% Assumptions: Owners are a non-resident couple drawing US$ / €1,500 per month in rent, with no other local income. |
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Roundtrip Cost:
12.1%
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: 0.0 Assumptions: The property was bought for US$250,000 / €250,000, and sold 10 years later, after a 100% appreciation. |
| Landlord & Tenant Law: Neutral Rating is based on a detailed study of each country’s law and practice. | |
JANUARY 2008
- Caribbean real estate at peak - Nation
OCTOBER 2007
- IMF predicts slowdown in Caribbean economies - BBC Caribbean
DECEMBER 2006
- New interest rate adjustment expected to slow credit growth - The Barbados Advocat
SEPTEMBER 2006
- Caribbean countries good for business - BBC
- High-value essential to Barbados Services - The Barbados Advocat
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