Dominica: Overview

RENTAL YIELDS

Last Updated: Dec 05, 2005

Very poor yields in Dominica

Gross rental income returns (yields) are around 4% to 5% for properties located in Dominica’s coastal areas, in some cases it can reach up to 6.7%. Rents in the islands are predominantly seasonal but these yields figures are for long-term rentals.

Rentals have not risen during the last five years, save around Picard. A two bedroom property rents for about US$800. Some higher end rentals have dropped as the offshore industry has declined.

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TAXES AND COSTS

Last Updated: Jul 25, 2006

Rental income tax is high in Dominica

Rental Income: Rental income is taxed at progressive rates from 20% to 40%, depending on the tax base.

There is no capital gains or inheritance tax.

Residents: The same rates of income tax apply to both residents and non-residents. Residents are taxed on worldwide income.

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BUYING GUIDE

Last Updated: Apr 03, 2008

Buying costs are high in Dominica

Total roundtrip transaction costs, i.e., the cost of buying and selling a property, are at 28.45% of the property value.

The Alien Land Holding License fee is 10% of the land's market value. The buyer pays legal fees (3% + 15% VAT), judicial fees (2.5%), and the assurance fund (1%). The seller usually pays the agent's commission of 5%. The buyer pays 4% stamp duty, while the seller pays 2.5% stamp duty.

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LANDLORD AND TENANT

Last Updated: Jun 08, 2006

Dominica law is pro-landlord

Rent: The rent can be freely agreed, except when less than US$300 a month, where the highly pro-tenant Tenancies and Rent Control Act applies.

Tenant Security: The recovery of premises from an unsatisfactory tenant must go to the High Court, and this can take time. But a tenant who thinks he has no defense to a claim for possession would normally vacate upon commencement of proceedings. To do otherwise is to bear unnecessary legal costs.

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ECONOMIC GROWTH

Last Updated: Jun 04, 2007

Away from the world

Dominica (pop 70,000, GDP per capita US$4,116) lives up to its name as the “Nature Island of the Caribbean.” It is the youngest of the Caribbean islands, and there truly is a lot to explore.

A haven for nature lovers; its mountainous terrains proliferate with virgin forests, natural springs, and a multitude of rivers cascading down steep cliffs to meet the coast. Moreover, it is one of the world’s premier diving spots, its surrounding reefs emanate from the Island’s volcanic origins.

Highly dependent on agriculture, Dominica's economy remains very vulnerable to climatic conditions and to international economic developments. The economy grew by an average of 2.5% per year from 2003 to 2005. Growth of 2.8% is expected for 2006.

Developing tourism is difficult because of the rugged coastline, lack of white sand beaches, and the absence of an international airport. The number of visitors increased by 1.6% per year between 1999 and 2002.