British Virgin Is.: Overview

RENTAL YIELDS

Last Updated: Feb 20, 2009

Very poor yields in the BVI, at 2.85%

Rental yields for apartments in the BVI are unavailable. However the average rent per month for one and two-bedroom apartments cost around US$1,200 and US$1,900 respectively.

Returns for houses remain very poor, reaching a mere 2.85% on average. A house with four to five bedrooms will cost around US$2.3M.

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TAXES AND COSTS

Last Updated: Jan 19, 2009

British Virgin Islands levies property taxes only

Effective Tax Rate on Rental Income
Monthly Income	US$1,500	US$6,000	US$12,000
Tax Rate	7%	7%	7%
Click here to see a worked example
Source: Disclaimer

There are no income, capital gains and inheritance taxes in the British Virgin Islands. The condition is the same for residents and non-residents.

Hotel Accommodation Tax: Gross rents received from guests staying for short periods of time in the islands (less than six months) are subject to 7% hotel accommodation tax. Long-term rentals and leases to British Virgin Islands residents are not liable for this tax.

Property Tax: Land tax is based on the acreage of the property; it is imposed at US$150 for the first acre and additional US$50 for each extra acre thereafter. House tax is imposed at a flat rate of 1.5% of the property’s annual rental value.

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BUYING GUIDE

Last Updated: Mar 05, 2008

Buying costs are high in the British Virgin Islands

Roundtrip transaction costs range from 11% to 22% of the property value. For non-belongers, the stamp duty of 12% of the property's value accounts for the greater part of the costs. Legal fees are imposed on the property value, 2% for the first US$100,000 and 1% on the remaining amount. Real estate agent's commission is negotiable, typically from 6% to 8%.

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LANDLORD AND TENANT

British Virgin Islands tenancy laws

Tenancies in the British Virgin Islands are usually short-term tenancies. It takes an average of 58 days to evict a tenant.

ECONOMIC GROWTH

Last Updated: Feb 04, 2009

Twin pillars of the BVI’s economy

First settled by the Dutch in 1648, the BVI (pop. 22,000) were annexed in 1672 by the English. The climate is subtropical and humid, but temperatures are moderated by trade winds. The coral islands are relatively flat; while volcanic islands are steep and hilly.

The BVI’s economy is one of the most prosperous in the Caribbean, with an average annual GDP growth of 9.5% from 2004 to 2007. The economy is highly dependent on financial services and tourism. Financial services account for almost 50% of national income while tourism generates around 45%.

It was the offshore industry which pushed the BVI forwards. In mid-1980s, the BVI adopted legislation encouraging rapid expansion of international financial services. Now, the BVI is considered one of the leading offshore jurisdictions, with over 550,000 registered companies.

However, new international business company incorporations in BVI were down 20% in 2008, as a result of enhanced regulatory scrutiny of offshore financial centres.

Tourism also plays a vital role in the economy. People visiting the British Virgin Islands increased an average of 10.4% per year from 2004 to 2008, whereas stay-over visitors to the islands increased an average of 4.6% per year over the same period. The total number of visitors to the islands was 917,683 in 2008, of which 345,934 stayed over.

Despite the BVI's status as a British dependent territory and many British influences, the prevailing cultural influences are more American than British. BVI belongers have automatic UK citizenship. But this right is not reciprocal, and UK citizens wishing to become BVI belongers must endure the same delays and uncertainties as other outsiders.

The BVI comprises 16 inhabited and more than 34 uninhabited islands. The largest islands of the group are Tortola, Virgin Gorda, Anegada, and Jost Van Dyke. Road Town, the capital and largest town, is situated on Tortola.