Turks and Caicos is an archipelago of 40 islands and cays located southeast of the Bahamas. It has become a popular destination for real estate investment due to its beautiful beaches, clear waters, and stable economy. Here´s a step-by-step guide on how to buy real estate as a foreigner in Turks and Caicos.
1. Research the local market
Turks and Caicos is a popular destination for foreign real estate buyers, particularly for those interested in luxury vacation homes and rental properties. Before investing in real estate in Turks and Caicos, it´s important to research the local market and understand the unique factors that can impact property values and rental rates.
Some key factors to consider include the state of the local economy, which is heavily dependent on the tourism industry, as well as the current supply and demand for real estate in different areas of the island. For example, properties located near popular beaches or tourist attractions may command higher rental rates than those in more remote areas.
Some of the most popular locations for real estate investment include Providenciales, Grand Turk, and North Caicos. The average price of a single-family home in Providenciales is around $1 million, while the average price of a condominium is around $550,000.
2. Work with a local attorney and real estate agent
As a foreign buyer, it´s recommended to work with a local attorney and real estate agent who are familiar with the local market and can assist with the legal and logistical aspects of the purchase.
Your attorney can assist with obtaining a landholding license, which is required for foreign buyers to purchase property in Turks and Caicos. They can also review all legal documents related to the purchase, including the purchase agreement and any permits or licenses required for the property.
Your real estate agent can help you identify properties that meet your specific needs and budget, as well as negotiate with the seller on your behalf. They can also provide valuable insights into local market trends and rental rates.
3. Secure financing (optional)
Financing for real estate purchases in Turks and Caicos is typically available with a down payment of 50% or more. However, it may be more advantageous to secure financing from your own country, particularly if you cannot meet this requirement.
Some of the local banks that work with foreign buyers include RBC Royal Bank, Scotiabank, and FirstCaribbean International Bank.
4. Obtain a landholding license
Foreign buyers are required to obtain a landholding license from the Turks and Caicos government before purchasing property. The license is typically issued within a few weeks and is granted on a case-by-case basis.
To obtain a landholding license, you´ll need to contact the Ministry of Immigration, Citizenship, Labour and Employment Services of the Turks and Caicos Islands at the following address and phone number:
Department of Immigration
Government Plaza, Grand Turk
Turks and Caicos Islands
Phone: (649) 946-2801
Your attorney can assist with the application process and ensure that you provide all necessary documentation.
5. Consider additional fees and taxes
In addition to the purchase price of the property, there may be additional fees and taxes associated with the purchase. These can include stamp duty, legal fees, and the landholding license fee.
Stamp duty in Turks and Caicos is calculated as a percentage of the purchase price, with rates ranging from 0% for properties under $25,000 to 10% for properties over $1 million. Legal fees can also vary depending on the complexity of the purchase and the services required.
Understand property management and rental regulations
If you plan to use your property as a vacation rental, it´s important to understand the local regulations and requirements for property management and vacation rentals.
Turks and Caicos has strict regulations governing vacation rentals, including requirements for obtaining a tourism accommodation license and paying tourism accommodation taxes. Your real estate agent can provide guidance on these regulations and connect you with property management companies that can help you navigate them.
|Costs||% from the transaction||Who pays?|
|Stamp Duty||2.50% - 8%||buyer|
|Legal Fees||0.85% - 2.00%
0.85% - 2.00%
|Real Estate Agent´s Fee||6.0% - 10.0%||seller|
|Costs paid by buyer||3.35% - 10%|
|Costs paid by seller||6.85% - 12.00%|
|ROUNDTRIP TRANSACTION COSTS||10.20% - 22%|
|Source: Global Property Guide|
Stamp duty on property transfers is levied at progressive rates, depending on the property value.
STAMP DUTY ON PROPERTY TRANSFERS
|PROPERTY VALUE, US$||RATE|
|Up to US$10,000||2.5%|
|US$10,000 - US$75,000||5%|
Legal fees are generally negotiable, however, the Turks and Caicos Islands Bar Association recommends the following scale.
|PROPERTY VALUE, US$||LEGAL FEES|
Some lawyers are offer legal fees of 1% for properties worth US$700,000 and above, and 0.85% for values above US$1 million. Some lawyers charge a minimum amount of US$1,250. Each party pays for their own lawyer.
Real Estate Agent´s Fee:
The real estate agent´s commission depends on the type of property. If the property is an undeveloped land, the real estate agent´s commission is at 10%. If the property is developed, the real estate agent´s commission is at 6%.
6. Best locations for rental investment property
The best locations for rental investment property in Turks and Caicos will depend on your specific investment goals and budget.
However, some areas that are popular with vacation rental investors include Grace Bay, Long Bay, Leeward and Turtle Cove.
Cons and Pros of Investing Turks & Caicos Property Market
There are several pros and cons to consider when investing in real estate in Turks and Caicos. Here are some of the main ones:
- Beautiful location: Turks and Caicos is a stunning location with crystal clear waters and white sand beaches, which can attract tourists and make it a desirable location for real estate investment.
- Growing tourism industry: The tourism industry in Turks and Caicos has been growing in recent years, with more and more visitors coming to the islands each year. This can lead to a high demand for short-term rental properties, which can provide a good return on investment.
- Tax benefits: Turks and Caicos offers several tax benefits to real estate investors, including no income tax, no capital gains tax, and no inheritance tax. This can make it an attractive location for investment.
- Political stability: The country has a stable political system, which can provide a sense of security for real estate investors.
- High prices: Real estate prices in Turks and Caicos can be quite high, which can make it difficult for some investors to enter the market.
- Limited inventory: The inventory of real estate in Turks and Caicos is limited, which can make it challenging to find a property that meets your needs.
- Limited financing options: Financing options for real estate purchases in Turks and Caicos can be limited, which can make it difficult for some investors to secure funding.
- Another con to consider when investing in real estate in Turks and Caicos is the risk of hurricanes, as the islands are located in the Atlantic hurricane belt. While measures have been put in place to minimize the impact of hurricanes, investors should carefully consider the potential risk of damage to property and tourism before making a decision to invest.