Barbados: Guide to Buying Costs and Procedures
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Barbados' roundtrip transaction costs are now moderate
How high are realtors’ and lawyers’ fees in Barbados? What about other property purchase costs?
Transaction Costs |
||
| Who Pays? | ||
| Legal Fees | 1.5% - 2% (+ 15% VAT) 1.5% - 2% (+ 15% VAT) |
buyer seller |
| Real Estate Agent's Commission | 5% (+ 15% VAT) | seller |
| Transfer Tax | 2.5% (w/ exemptions) | seler |
| Stamp Duty | 1.00% | seller |
| Costs paid by buyer | 1.73% - 2.30% | |
| Costs paid by seller | 9.98% - 11.55% | |
| ROUNDTRIP TRANSACTION COSTS | 11.71% - 13.85% | |
| See Footnotes Source: Global Property Guide |
||
How difficult is the property purchase process in Barbados?
Generally there are no restrictions on foreign ownership except for one formality: nonresidents must obtain permission from Barbados' Central Bank if they want to buy property. This is pro forma, but failing to do so will void your purchase.
The Central Bank of Barbados requires registration of all money brought into the country. It is best to hire a lawyer to help with the Central Bank and purchase transaction.
Once a price agreement has been reached, the purchaser and vendor sign a contract prepared by the vendor's attorney. At this time a 10% deposit is paid by the purchaser which the vendor’s lawyer will hold in escrow until completion, when the balance of the purchase price is paid and the title passes to the purchaser by way of the conveyance.
In Barbados property passes by conveyance of title, evidenced by the recording of title deeds and certified survey plans at the registry of title. A purchaser will need a registered Barbadian attorney to search the register and establish title to the property prior to the completion of a sale. Between the time of executing the contract and the completion of the sale, the legal representative of the purchaser will search the title, and ensure that there are no encumbrances, charges, encroachments, or other impediments to the sale. This normally takes two to three months.
The final step is for the vendor to pay for the transfer taxes and the government stamp duty.
Footnotes to Transaction Costs Table
The round trip transaction costs include all costs of buying and then re-selling a property – lawyers’ fees, notaries’ fees, registration fees, taxes, agents’ fees, etc.
Currency:
Barbados uses Barbadian Dollar (BBD), which is pegged to the US dollar at US$1:BBD2. Property value is BBD500,000.
Transfer Tax:
Transfer Tax has been reduced to 2.5% in 2008 from its previous rate of 7.5%. For purchase of house and land, the first BBD125,000 is tax exempt.
Stamp Duty:
Stamp Duty is 1% purchase price.
Legal Fees:
Each party pays for their own lawyer. Legal fees are negotiable, at around 1.5% to 2% plus 15% VAT.
Real Estate Agent's Fee:
Real estate agents’ commission is negotiable, typically at 5% plus 15% VAT.
Barbados - more data and information
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Your Comments
posted by Alan Campbell | 2008-02-10
Company Director, United Kingdom
Can a Barbadian Lawyer act for both the Vendor and the Purchaser at the same time ?