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Purchasing
Real Estate in the British Virgin Islands
Alien Land Holding License
All investors, including citizens of the United Kingdom
are required to obtain an Alien Land Holding License to
purchase property in the BVI. Agreements to purchase property
are therefore made contingent upon a license being obtained
by the purchaser. A License gives entitlement to own a
specific property.
Application for a Non-Belongers license is made to the
Minister of Natural Resources, Government of the British
Virgin Islands and must be supported by two character
references, financial references and a police certificate
of good standing.
If an application for a license relates to undeveloped
or partially developed land, the applicant will be required
to make a commitment to the BVI Government to expend a
specific sum on development within within a period of
time, usually 3 years. The development requirements will
be over $75,000 and will generally be proportionately
more according to acreage. Environment and other planning
considerations will determine the appropriate level of
development. Sub division is only allowed if part of a
comprehensive development.
A property can not be resold until the development commitment
has been fulfilled. One of the objectives of the licensing
regulation is to prevent speculation on undeveloped property.
The Minister of Natural Resources and Labour is responsible
for approval of License application except those in respect
of sites which extend to more than three acres are referred
to the Executive Council.
There is a license filing fee of $50.00 for each person
or company named in the application. Typically approval
may take between three and six months to obtain. The fee
for the grant of the License is $150.00 for each person
or company named in the license.
An overseas investor is free to let a property on a long
term or short term holiday basis upon approval of a trade
license application (see trade license requirements) and
an excellent standard of holiday rental management service
is available in the BVI.
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Procedure
for Purchasing Property
1) Earnest Deposit: It is normal practice
for a prospective purchaser to pay a 10% earnest deposit
to the vendors agent to be held in escrow prior to signing
of a purchase and sale agreement. Although payment of
a deposit does not bind the vendor or their agent legally
it is taken as a clear indication that a purchaser intends
to sign a purchase and sale agreement forthwith. Interest
earned on this deposit goes to the vendor.
2) Purchase and Sale Agreement: Once
agreement in principle has been reached between the purchaser
and the vendor, a legally binding purchase and sale agreement
drawn up by attorneys is signed by the parties. This will
normally contain a condition that completion of the purchase
is contingent upon the purchaser obtaining an Alien Land
Holding License.
3) Application for an Alien Land Holding License:
This may be made prior to, and in any event should be
made as soon as possible after signing of the purchase
and sale agreement.
4) Completion of the sale and transfer of title:
This will normally take place shortly after receipt of
the Alien Land Holding License. Payment of the balance
of the purchase price is due at this stage.
Note: Neither purchaser or vendor need be present
in the BVI at any stage of the transaction.
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Attorneys
The legal system in the BVI is based on English common
Law and locally enacted legislation. It is essential that
the purchase appoints any attorney in the BVI to act in
the purchase transaction. An attorney’s responsibilities
will normally include submitting the application for an
Alien Land Holding License. Standard conveyance fees are
2% of the first $50,000 and 1% of the remaining consideration
but not less than $150.00. There is an additional fee
of $300.00 for making the Alien Land Holding License application.
Tenure and Registration Section
The majority of land in the BVI is owned in fee simple.
A purchaser will normally acquire absolute title which
is registered in the BVI Government land Registry. Registered
titles relate to a detailed cadastral survey which defines
legal boundaries. No transfer of land can take place unless
the boundaries of the property have been determined to
the satisfaction of the Registrar of Lands. Property in
the BVI may also be held on long lease from the Crown
or private individuals. Most often the duration such leases
is 99 years. For practical purposes a purchaser of such
a leasehold interest will enjoy all the benefits of an
absolute title for the duration of the lease.
Financing a Purchase
Banks in the BVI offer worldwide banking service. Mortgage
finance of up to eight percent of the appraised value
of a property or the purchase price, which ever is the
lesser, will usually be available to overseas investors
subject to status. Construction finance is also available
. Mortgages are granted for terms of up to twenty years.
Interest rates are generally 1 1/2% above New York Prime
rate. Banks will consider financing the purchase of land.
(See listings of banks in the Category
section).
Real Estate
Tax
On the transfer of title to a property stamp duty at the
rate of 8% of the price or appraised value is payable
by the transferee (purchaser). Land Tax is assessed annually
at the rate of $50 for sites up to .5 acre, $150.00 for
sites between 0.5 and 1.00 acre and $50 for each additional
acre or part thereof. House Tax at the rate 1.5% of the
assessed annual rental value, are levied. In practice
this means that for an average two or three bedroom house
the annual taxes will be less than $500.00. |
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Building
a House
Building costs vary between $75.00 and $110.00 per square
foot for quality construction and finishes. A swimming
pool may cost in the range $20,000 to $40,00 to construct.
Several fist class architects and contractors are based
in the BVI and good skilled labour is available. Architects
fees will vary according to their level of involvement,
responsibility and the complexity of the work. Design
and supervision will generally cost approximately 10%.
From a planning stage a house may take 9 to 18 months
to complete.
Planning & Building Control
Development in the BVI is governed by Land Development
Control Authority who are concerned with planning matters
and by the Building Authority who are responsible for
ensuring that building conforms with the building code
guidelines. It is preferred if working drawings submitted
to these authorities are prepared by architects based
in the BVI.
Import Duty on
Possessions and Furnishings
Within six months of first arrival in the BVI, each adult
immigrant or person staying for more that six moths is
permitted to import up to $1,000 worth of used possessions
and furnishing without incurring liability to import duty.
After six months such items are subject to duty at a rate
which varies between 5% and 20%. Import duty on vehicles
is 20%.
Utilities and
Services
Electricity: A reliable
110V, 60 cycle mains supply is available on Tortola, Beef
Island, Virgin Gorda, Great Camanoe and Anegada.
Water: Although main water is available
in Road Town and several other parts of Tortola, most
water is economically provided by roof catchment of rainwater
which is stored in cisterns integrated with the foundation
design of each building.
Sewerage
in Road Town there is a main sewerage system. Elsewhere
private septic tanks are the normal
Immigration
Purchase of a property in the BVI does not in itself establish
resident status. However an identification card is available
to a person who holds an Alien Land Holding License which
will allow the holder to be granted leave to land in the
BVI for a period of up to six months. A certificate of
residence, entitling the holder to land or embark in the
Territory for an indefinite period, may be granted to
a person who intends to reside permanently in the BVI.
(See Immigration
requirements). |
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