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Last Updated: Jun 06, 2016




The property market in the British Virgin Islands is mixed, after several lacklustre years. House prices are now rising. While demand from both belongers and non-belongers remains down, tour facilities have been greatly expanded - and if history is a guide, more visitors will mean more buyers.

In 2015, residential property prices rose by around 10% to 12% from a year earlier, to a median sales price of about US$780,000, based on estimates from the figures released by the Land Registry.
  • In Tortola, the largest and most populated of the British Virgin Islands, the average sales price of high-end residential properties was US$2.27 million in 2015.
  • In Virgin Gorda, the second most populous and third largest of the British Virgin Islands, the average sales price of high-end residential properties was US$4.16 million in 2015.

However, demand for high-end properties remains weak. In fact, sales of residential properties priced over US$500,000 dropped by 38% in 2015 from a year ago, according to the Land Registry. The sales volume for properties priced over US$500,000 also dropped 29% in 2015, to US$23 million.

In 2015, sales to non-belongers - i.e., foreign homebuyers - dropped 18%.

European buyers dominate the BVI’s luxury market, accounting for 60% of luxury sales, according to Knight Frank’s Caribbean Desk Head Christian De Meillac.

Properties in the main islands of Tortola and Virgin Gorda are popular with foreign buyers, particularly on the western tip of Tortola near Smugglers Cove and Long Bay Beach. Homes with private moorings attract yachting enthusiasts. Demand for waterfront properties is also high.

Potential investors are not only looking for houses, but for land to develop—and the BVI is still largely undeveloped. In BVI, land can be bought starting at around US$100,000, versus around US$500,000 for developed properties.

The BVI’s official currency is the US dollar, so foreign investors do not have to be concerned about exchange rate fluctuations. Moreover, as an overseas territory of the United Kingdom, BVI enjoys a stable political culture, strong financial sector, and a high standard of living. Crime is also relatively low. Despite these benefits, some foreign investors are discouraged from investing in the BVI because of restrictions on foreign homeownership through landholding licenses and other government policies.

Analysis of British Virgin Is Residential Property Market »


RENTAL YIELDS
Last Updated: Feb 14, 2012



Rental yields are poor in the British Virgin Islands, with annual returns of only 2.85% - but then most people don’t buy here to rent. Three-bedroom houses in the British Virgin Islands sell for about US$1.3 million, but only earn average monthly rental incomes of around US$3,000.

House prices have fallen a little. Four-bedroom houses cost about US$2 million, a bit cheaper than last year’s price of US$2.5 million.

Rental incomes from apartments remain at just above last year’s levels. Last year, apartments in Virgin Goda and Tortola rented for an average of US$1,800 per month. This year, rents have risen slightly to an average of US$1,900 per month.

Read Rental Yields  »



TAXES AND COSTS
Last Updated: Dec 07, 2016



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

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 theproperty; it is generally imposed at US$50 per acre. Building tax is imposed at a flat rate of 1.5% of the property’s annual rental value.

Read Taxes and Costs  »



BUYING GUIDE
Last Updated: Dec 08, 2016



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%.

Read Buying Guide  »



LANDLORD AND TENANT
Last Updated: Jan 01, 1970


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.

Read Buying Guide  »



ECONOMIC GROWTH
Last Updated: Jun 06, 2016


The economy’s “twin pillars”

British Virgin Islands gdpThe British Virgin Islands is one of the Caribbean’s most prosperous economies. After a slump in 2002 (-3.3%) and 2003 (-12.6%), the BVI bounced back with average annual GDP growth of 5% from 2004 to 2007, and then 1.5% from 2008 to 2010, according to the UN Statistics Division. The economy contracted by an annual average of 1.7% from 2011 to 2014. The economy expanded by 2.4% last year and further growth is expected in the next two years, driven by strong economic growth in the United States.

BVI has stable and low inflation, ranging from 1.8% to 2.5% from 2010 to 2015.

BVI’s economy is supported by the “twin pillars” of financial services (which account for 60% of GDP), and tourism.

BVI’s tourism sector has been depressed since the financial crisis. In 2009, total visitors to the BVI fell by 8.6%, according to the Caribbean Tourism Organization.  Total visitor arrivals were down 0.9% in 2010, 1.3% in 2011, 9.4% in 2012, and 1.5% in 2013. The tourism sector started to bounce back in 2014 when the total number of visitor arrivals increased 4.1% from a year earlier. Then in 2015, visitor arrivals increased 19.4% y-o-y to 922,372 people, according to official statistics released by the Government of Virgin Islands. The BVI had about 393,000 stop-over visitors in 2015, up by 1.8% from a year ago. The increase in cruise passengers was even bigger in 2015, rising by 36.6% to 516,436 from just 378,083 in 2014.

Total visitor expenditures increased 5.5% y-o-y to US$484.3 million in 2015, according to government figures. About 90% of that came from stay-over visitors.

The BVI's financial services sector suffered a dip in 2009, but has since largely recovered. New company incorporations increased from 100,000 in 1993 to more than 480,000 in 2013, according to the AMB Country Risk Report of 2015.

As of March 2015, there were 143 captive insurers and 36 domestic insurers on the BVI, making it the world’s 4th largest captive insurance domicile. In Q1 2015, there were over 478,000 companies registered in the BVI International Financial Center. Among the 86 leading international financial centres, the BVI ranked 46th in the Global Financial Centers Index published in March 2016, down by three notches from the previous year.







  • Pro-landlord rental market
  • Minimal property taxation
  • Moderate yields
  • High transaction costs
  • Significant buying restrictions
RESIDENTIAL PROPERTY FACTS
Price (sq.m): $6,469 For a 120 sq. m. property, usually an apartment.
Rental Yield: 2.85% For a 120 sq. m. property, usually an apartment.
Rent/month: $3,071 For a 120 sq. m. property.
Income Tax: 7.00% Assumptions: Owners are a non-resident couple drawing US$ / €1,500 per month in rent, with no other local income.
Roundtrip Cost: 16.50% 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: Neutral Rating is based on a detailed study of each country’s law and practice.




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