Market in Depth

Investing in Turks & Caicos Real Estate (Cons and Pros)

Maria de Guzman | June 20, 2019

Property prices in TCI have risen by an average of 5.5% per year over the past decade, driven by increased demand from foreign investors, the development of new luxury resorts and residential projects, and the island's reputation as a safe and stable location for investment.

Investors from the United States, Canada, and Europe have been drawn to the TCI property market due to the island's warm climate, stunning beaches, and relaxed lifestyle. The government has introduced initiatives to encourage foreign investment, including tax breaks and streamlined property purchasing procedures.

However, the limited supply of developable land on the islands has led to high land prices and limited opportunities for new construction. Additionally, natural disasters such as hurricanes can damage or destroy properties and lead to temporary dips in the market.

Despite these challenges, the TCI property market is expected to continue its upward trajectory due to domestic and foreign demand, investment in new projects and infrastructure, and the island's reputation as a premier luxury destination. However, potential investors should be aware of the risks involved in any real estate investment and should carefully consider factors such as location, property condition, and market trends before making a purchase.

Analysis of Turks & Caicos Is. Residential Property Market »

Rental Yields

There is not a sufficient long-term rental market on the islands to draw conclusions for rental yields. However, short-term rental properties can generate 6% to 12% gross yields, while net yields hover around 5-6%.

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Taxes and Costs

There are no income taxes, property taxes, capital gains taxes, or inheritance taxes in the Turks and Caicos Islands for residents and nonresidents alike.

However, the Tourist Accommodation Tax in the Turks and Caicos Islands is a tax levied on visitors who stay in tourist accommodation, such as hotels, resorts, and vacation rentals. The tax rate is currently 12%, and it is typically included in the cost of the accommodation. The tax is collected by the government and used to fund tourism-related infrastructure and marketing initiatives. It's important to note that the Tourist Accommodation Tax is separate from other taxes, such as the Value Added Tax (VAT), which is also charged on goods and services in the TCI.

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Buying Guide

Roundtrip transaction costs are around 10% to 22% of the property value, inclusive of the real estate agent’s commission at 6% to 10% (seller.

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Landlord and Tenant

Rent: Rents and rent increases can be freely negotiated.

Tenancy Contract: Rental agreements in Turks and Caicos are either short-term contracts (up to a month) or long-term contracts (more than a month). For long-term rental agreements, tenants usually pay a security deposit equivalent to one month’s rent before occupancy.

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