The Property Banks Buyers Guide to BVI
The Non-Belongers Land Holding License:
It is possible for any person (including a corporation and/or
partnership) to purchase property in the British Virgin Islands. All
overseas investors require a Non-Belonger Land Holding License to
purchase property. Agreements to purchase property are therefore
made contingent upon such a license being obtained by the purchaser.
Application for a ‘Non-Belonger Land Holding License’ is made to the
Government of the British Virgin Islands. The applicant is required
to make a commitment to the Government of the British Virgin Islands
to expend a specified sum on an Estate lot within a period which
will normally be less than three years. The declarations and
covenants of Oil Nut Bay Estate require that development of the
Estate lot commence within twelve (12) months of the approval of a
Land Holding License. Environmental and other planning
considerations will determine the appropriate level of development.
The Minister of Natural Resources and Labor is responsible for
approval of license applications.
There is a license filing fee of $50.00 for each person or company
named on the application. Typically, approval may take between three
to nine months to obtain, however the staff of Oil Nut Bay Realty
are available to work with you. The fee for the granting of the
license is $150.00 for each person or company named in the license.
There are no restrictions on an overseas investor reselling a
developed property. An overseas investor is free to let a property
on a long-term or short-term vacation basis upon approval of a Trade
License application.
Procedure for Purchasing Property:
Earnest Deposit: The Prospective Purchaser is required to pay a 10%
earnest deposit to Spanish Town Development Co Ltd agent to be held
in escrow upon the signing of a Sale and Purchase Agreement. Oil Nut
Bay Realty will only submit an offer when a 10% deposit and a Sale
and Purchase Agreement has been signed by the Purchaser.
Application for a Non-Belonger Land Hold
License:
Four consecutive weekly advertisements from a local newspaper
stating the property description and price must accompany the
application for the Land Holding License. Financial and personal
references, a Police Certificate verifying no criminal records, the
proposed scope of the development on the Estate Lot and an 8”x10”
cadastral plan of the parcel from a local licensed surveyor are also
requirements. The Purchaser should begin processing the Land Holding
License application as soon as possible after signing of the Sale
and Purchase Agreement in order to adhere to the time limitations.
Sale and Purchase Agreement:
Once an agreement has been reached between the purchaser and Spanish
Town Development Co. Ltd, a legally binding Sale and Purchase
Agreement, is then signed. If the purchaser is not a Belonger of the
British Virgin Islands then a clause containing the condition that
completion of the purchase is contingent upon the purchaser
obtaining a Land Holding License will be added.
Immigration:
Purchase of a property in the British Virgin Islands does not in
itself establish resident status. When you are granted a Land
Holding License, you can apply to the Immigration Department for a
six months residency card which entitles you to reside in the BVI
for six months in any one year. If you wish to remain for longer
periods or permanently then you must apply for a Certificate of
Residency entitling the holder to land or embark in the Territory
for an indefinite period. An application can be obtained from the
Immigration Department at the Government Administration buildings
either in Road Town, Tortola or Spanish Town, Virgin Gorda.
Work Permits & Trade Licenses:
A work permit is required by Non-Belongers who wish to engage in
temporary or permanent employment in the British Virgin Islands.
Permits will only be granted where it is demonstrated that the
position cannot be filled from the local labor force.
Property rental in the British Virgin Islands is recognized as a
business and all businesses need a Trade License. When the Land
Holding license application is submitted you should consider
requesting this permission in order to rent your property.
A work permit will also be required in conjunction with the Trade
License if the business operator is self-employed. Details of these
regulations can be obtained from the Ministry of Natural Resources
and Labour and the Chief Minister`s office.
Completion of the Sale and Transfer of Title:
Completion will normally take place within 30 days of receipt of the
Land Holding License. Payment of the balance of the purchase price
is due at this stage. Neither purchaser nor vendor need be present
in the British Virgin Islands at any stage of the transaction.
Tenure & Registration of Title:
The majority of land in the British Virgin Islands is owned fee
simple and to ensure proper and absolute title, must be registered
with the Government of the British Virgin Islands Land Registry.
Registered titles relate to a detailed Cadastral Survey that defines
legal boundaries. No transfer of land can take place unless
boundaries of the property have been determined to the satisfaction
of the Registrar of Lands.
Attorneys and the Legal System:
The legal system in the British Virgin Islands is based on the
English Common Law and locally enacted Legislation.
It is essential that the Purchaser appoint an attorney in the
British Virgin Islands to act in the purchase transaction. An
attorney’s responsibilities will normally include submitting the
application for a Non-Belonger Land Holding License. In general,
sale conveyance fees are 2% of the first $1000,000 and 1% of the
remaining consideration but not less than $150.00. There is an
additional fee of $300.00 for preparing the Land Holding License
application. The Purchaser’s verification of the fee structure for
the selected attorney is recommended.
Financing a Purchase:
The following banks in the British Virgin Islands offer world wide
banking services:
First Bank Virgin Islands
First Caribbean International
Bank of Nova Scotia
Banco Popular
Mortgage finance is customarily approved ranging from 70% - 80% of
the appraised value of a property or the purchase price, whichever
is less. Construction financing is also available. Mortgages are
granted for up to terms of up to twenty years. Interest rates are
generally one and a half to two per cent above New York Prime Rate.
Banks will also consider financing the purchase of the land with
structures or improvements.
Real Estate Taxes:
On the transfer of title to a property Stamp Duty, at the rate of 8%
of the price or appraised value, is payable by any Non-Belonger
Purchaser. Belongers are required to pay a 4% Stamp Duty.
The annual Land Tax is levied at the rate of $50.00 up to the first
half acre, $150.00 up to one acre and $50.00 on each acre
thereafter. House Tax is levied at the rate of 1.5% of the assessed
value.
Income Tax:
Any individual who is a resident of the British Virgin Islands or
elsewhere is required to pay BVI Income Tax. A non-resident is
required to pay BVI Income Tax on the taxable income received in the
British Virgin Islands. Income Tax is levied on a sliding scale of
between 6% and 20%.
Building a House:
Building costs vary between $190.00 and $250.00 per square foot for
quality construction and finishes. Several first class architects
and contractors are based in the British Virgin Islands and good
skilled labor is available. Architects fees will vary according to
their level of involvement, responsibility and the complexity of the
work. Fees for design and supervision will generally be about 10%.
Building materials can be obtained through local merchants or may be
imported directly. Import duty is levied at rates between 5% and
20%. From the planning stage a house may take 9 to 18 months to
complete depending on the complexity of the design and personal
preferences of the prospective owner.
Planning and Building Control:
Development proposals must be approved by the Land Development
Control Authority who is concerned with government planning and by
the Building Authority who is responsible for ensuring that
buildings are of structurally sound design. It is preferred that the
working drawings be prepared and submitted to these Authorities by
architects based in the British Virgin Islands.
Import Duty on Possessions and Furnishing:
Within six months of first arriving in the British Virgin Islands
each adult immigrant or person staying for more that six months is
permitted to import up to $1`000.00 worth of “used” possessions and
furnishings without incurring liability to import duty. After six
months, such items are subject to duty at rates that vary between 5%
and 20%. Import duty on vehicles is 20%.
New possessions and furnishings, whether imported before or after
the expiration of six months are liable to duty charges.