The Cayman Islands are known for the beautiful beaches, resorts and scuba diving and snorkeling sites. While the British Overseas Territory is also known for the beneficial conditions for Cayman Islands company formation, it is also a location when entrepreneurs may wish to purchase property for personal or commercial use.
Buying real estate in this location is simple and straightforward, helped by the fact that English is an official language and the jurisdiction is a tax neutral one. However, despite the simplicity, investors who wish to purchase a property in the Cayman Islands will need to be prepared for the prices that are common for this location.
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Main reasons to buy property in the Cayman Islands
A tropical climate, beautiful islands and plenty of entertainment activities are three reasons why the Cayman Islands are attractive for tourists. And the same main reasons can also apply to those who wish to purchase a property in a unique island paradise.
However, natural beauty is not the only reason why individuals and entrepreneurs are purchasing property here. Some of the other reasons are listed below by our Cayman Islands incorporation agents:
- Tax neutrality: there are no taxes payable on income, there are no inheritance taxes or capital gains taxes.
- Accessibility: proximity to the United States is an advantage for many investors; with a direct flight, Miami is just one hour away.
- Infrastructure: the international airport has been expanded and it can easily accommodate the millions of tourists coming to the islands each year.
- Friendliness: the islands are known to be welcoming, safe and friendly; new property owners and residents are welcomed.
- Stability: the Cayman Islands enjoy the status of being a British Overseas Territory.
The tax neutrality of the Islands also makes them attractive to international investors. Setting up a Cayman Islands company is also a simple process during which our experts in incorporation can offer the needed assistance, particularly to those foreign nationals who cannot be present in the location at all times.
How to purchase property in the Cayman Islands
Purchasing a property is an important decision and investors should first answer some important questions:
- -the budget: the Cayman Islands has a varied offer in terms of real estate that also includes luxury properties; establishing the budget is an important phase in order to determine the types of properties that are targeted.
- -the location: another important decision that is linked to the property prices, as some areas are more coveted than others.
- -work with an agent: this step is optional, however, a real estate agent can help you find the property you are looking for much faster; he will also be able to explain the process.
- -due diligence: inspecting the property and making a documented choice before singing the property transfer documents falls onto the buyer; a minimum real estate due diligence is recommended.
The following documents should be verified during the due diligence: the title documents (the land register for the parcel or the house), leases verification and review as well as specific inquiries with the seller about the condition of the property. The property sale/purchase agreement can be a standard one and buyers are required to present personal identification documents when entering into the agreement.
The stamp duty is the only notable type of tax applicable to property purchases in the Cayman Islands. one of our agents who specialize in Cayman Islands incorporation can also provide information about the local tax laws.
According to the Economics and Statistics Office, the following data applied at the end of 2018 for the population in the Cayman Islands:
- -total population in George Town: 34,878;
- -population in West Bay: 12,624;
- -people in Bodden Town: 12,649;
- -total population across all of the six districts: 65,813.
The Cayman Islands is a tax-neutral jurisdiction that also has no restriction on the ownership of land or property. This, together with the simple property purchase transaction, are the main reasons why foreign nationals are choosing to invest in real estate.
Investors who are interested in more information about property purchase in this jurisdiction can reach out to our Cayman Islands incorporation specialists. We provide complete services to investors who wish to open a company and can assist with further services in the post-incorporation phase, among which assistance for purchasing a property when the owner is a legal entity.
Due diligence before the buying process
Real estate due diligence in the Cayman Islands is a common practice and it represents an investigation of the property, prior to signing the final purchase documents. The buyer is advised to perform this step in order to ensure that the property has its proper title documents, to have a clear image of the property’s current state as well as determine if any leases are taken on the property.
The due diligence checklist will depend on the type of property that is being purchased as well as its use. In some cases, investors may wish to work with a professional who specializes in offering these particular types of services.
Apart from being interested in Cayman Islands company formation, foreign investors are also attracted by the evolving and diverse real estate market. Many properties are selling quickly especially those that are located along Seven Mile Beach, the top location on the Island and also one of the areas with the most expensive housing.
Owning residential or commercial real estate in the Cayman Islands is simple for foreign investors who are also enjoying the ability to own land. Investments are convenient particularly because there are no property taxes and no restrictions on ownership. In addition to these favorable conditions, the British Overseas territory also offers beautiful beaches and scenery and it is an attractive holiday destination.
The real estate due diligence checklist in the Cayman Islands
Some of the most common items that are verified during due diligence include the following
- Title: the copy of the land register map extract for the property in question;
- Lease matters: information on whether or not there are any leases on the property and, if so, what are their terms.
- Financial information: can include utility bills, expenses, bills for past improvements to the property.
- Litigation: whether or not the property in question is subject to any open claims.
- Physical inspection: an assessment of the physical situation compared to the built plans, the current status of the property.
Please remember that this checklist is not an exhaustive one and some buildings may be subject to more thorough inspections, such as obtaining information about engineering reports or environmental reports (for commercial property, when applicable).
The Cayman Land Info portal operates under the Lands and Survey Department and offers a set of useful features to users. Access to services such as cadastral information or land registry and terrain or planning information is subject to an annual yearly fee.
Real estate investors can use the available online tools as well as work with a professional who offers complete real estate due diligence services in the Cayman Islands.
Those who are interested in setting up a Cayman Islands company and then purchase property can reach out to one of our agents.
The property market in the Cayman Islands
The Cayman Islands are attractive to investors who wish to set up a business that is subject to tax neutrality. This is why many entrepreneurs choose to open a Cayman Islands exempted company. however, the beautiful islands are also a top destination to invest in real estate because of the good weather, proximity to the United States, the mature and diverse real estate market and the fact that English is the official language.
According to an independent review of the property market in the Cayman Islands performed by Charterland, the situation was as follows:
- 1,857: the total real estate transfers registered with the Land Registry in 2018;
- 1,702: the real estate transfers registered in 2017; there is a 9% increase in 2018;
- 800 million CI $: the value of total sales in 2018, the highest value for sales in one year according to the source;
- 679 CI $: the value of real estate sales in 2017, meaning that the increase in 2018 had a 17.8% value.
The increase in the volume of property sales has contributed to an increase in the average property value.
Investors who are interested in purchasing land via a legal entity incorporated in this jurisdiction should know that the Cayman Islands exempted company may now own land without prior special approvals. One of our agents can provide more details on this matter.
The Cayman Islands has a relatively small property market, however, it does contain a number of sub-markets that perform well. Some of these categories may include condominiums, houses, land and the commercial market.
When purchasing a property in any of the areas of interest, it is recommended to perform a real estate due diligence.
If you would like to purchase a property as part of the process to set up a Cayman Islands company, our team can also assist throughout the company formation stages. We are a team of experts specializing in incorporation matters and can assist local and foreign investors looking to open an onshore or an offshore company. Get in touch with us for more information about our services.
Contact our Cayman Islands company formation agents for more information about our services.