More and more individuals are choosing to make Barbados their home away from home or as a sound property investment opportunity. In this article we explore what the island has to offer and how to make a property purchase as smooth as possible.
Mention Barbados, and for most, a luxurious Caribbean dream springs to mind. Glorious sunshine, warm smiles, crystal-clear seas lapping on white sandy beaches, a backdrop of lush tropical greenery, and a laid-back vibe. There may be a rum punch in hand, with the sound of steel pans in the background travelling on a gentle breeze.
This dream is a reality for thousands of visitors each year. They come for a variety of reasons, whether it's surfing on the East coast, indulging in water sports, playing golf or tennis, enjoying duty-free shopping, savouring delicious dining experiences, or simply basking in the island's beauty.
Prior to the pandemic, Barbados witnessed a steady increase in visitor numbers as it transformed into a republic. Then the pandemic prompted a surge in applications for the 12-month Welcome Stamp visa, attracting remote workers seeking a change of scenery and lifestyle. Many of these visitors ultimately become second homeowners, seeking high-quality apartments, villas or homes in upscale resorts or gated communities, whether beach fronted or further inland – especially with several new developments that emphasise sustainability and eco-credentials becoming available and offering furnishing packages.
Investing from abroad
Foreign investors, primarily from the UK, USA, Canada, and Europe, flock to Barbados to purchase luxury properties on the West and Southern coasts. Many of these homes are rented out during peak months, providing extra income to cover expenses or serve as strategic investments. Owning property in Barbados offers not only a taste of paradise but also potential financial benefits.
Barbados caters to the needs of foreigners through Special Entry Residents Permits (SERPs), offering extended stays or permanent residency for retirement, work, or tax efficiency, and the process of acquiring property is relatively straightforward – with no restrictions on foreign ownership. However, foreigners need approval from the Exchange Control Authority and must register foreign currency funds with the Central Bank, typically handled by a local attorney representing the buyer.
The Barbados dollar is aligned to the US dollar, and some banks even offer US dollar mortgages to foreigners, making the tax system a favourable one, with no inheritance or capital gains tax.
Property transactions involve the seller paying 1% Stamp Duty and 2.5% Property Transfer Tax, along with an annual Land Tax based on property value. Additionally, there may be community or resort charges, depending on the location of your property.
Smoothing out the purchase process
To ensure a smooth property purchase in Barbados, potential buyers should have their finances in order and hire an attorney-at-law early in the process. The average time to buy a re-sale property is around three months, with a 10% deposit due on exchange and the remaining 90% paid on completion. If you're considering making this Caribbean paradise your new home or investment, our affiliate partners have extensive experience in Barbados property transactions and can assist you in finding your dream property on the island.