Belizean Dream: Buying A Home For 12 Million Dollars

Belize is a great place to buy property, especially for foreigners. The country abolished its Alien Landholding Act in 2001, giving non-citizens the same rights as citizens when it comes to purchasing property. This means that foreigners can buy condos, homes, and land without restrictions and own their property outright. The buying and selling process is also simple and loosely regulated, and foreigners don't need to be present in the country to complete the sale.

However, it's important to be aware of potential scams and to do careful research before purchasing property in Belize. Working with a reputable real estate agent and attorney can help ensure that you get a good deal and that everything is proper and legal. It's also recommended to see the property in person and get a property title search to ensure there are no outstanding liens and that the seller is the legal owner.

Property costs in Belize vary by location, with popular tourist destinations like Ambergris Caye and Caye Caulker being more expensive. However, it is still possible to find cheaper deals by shopping around or considering up-and-coming locations. As of June 2023, prices for homes in Belize ranged from $15,000 for a small house to $4.95 million for a luxury 8-bedroom mansion.

There are many advantages to buying property in Belize, including the low cost of living, simplified immigration process, potential for vacation rental income, and strong real estate market. Additionally, Belize has a stable government, uses the English language, and has a fixed currency exchange rate with the US dollar, making it an attractive option for foreign investors.

The benefits of buying property in Belize

Foreign Ownership Rights

Belize is one of the few countries in the world where foreigners have the same rights as nationals in land ownership. Foreigners can buy property without restrictions and own it outright, unlike many other countries where foreigners have limited rights and are required to lease property from the government. This makes the country a unique prospect among Caribbean and Central American nations.

Affordable Property and Taxes

Belize offers affordable property prices, with costs for a simple rental house near the sea starting from under $200 a month. Property taxes are also very low, with taxes on a $250,000 house often amounting to less than $1000 a year, and some rural properties being taxed at only a few dollars annually.

Additionally, there is no capital gains tax in Belize, meaning that if you sell property for a profit, you get to keep all the profits without having to pay any capital gains tax.

Simple Buying Process

The buying and selling of property in Belize is loosely regulated, making the process simple from an administrative standpoint. Foreigners do not need to go through a lot of red tape to purchase property, and they don't even need to be present in the country to complete the sale.

Strong Tourism Potential

Belize is a popular tourist destination, and its government has introduced several initiatives to encourage tourism, such as the digital nomad visa. This growing interest in vacationing in the country presents a great potential for earning income through vacation rentals.

English as the Official Language

Belize is a former UK colony, and English remains its official language. The lack of a language barrier can make finding and purchasing real estate easier for English speakers.

Retirement Benefits

Belize offers several incentives for retirees, such as the Qualified Retired Persons (QRP) program, which offers a smoother path to residency for people over 45 and provides an exemption from duty costs and certain taxes.

The costs of buying property in Belize

The Basics

Belize is known for its favourable real estate market for foreigners, with non-nationals enjoying the same rights as nationals in terms of land ownership and tenure. This means that foreigners can buy property outright, which is not the case in many other countries.

However, it is important to be aware of potential scams and to enlist the services of a licensed Belize real estate agent or ethical Belize attorney-at-law when purchasing property. A title search should also be conducted to ensure the property is free of any legal disputes, which can be arranged through a local attorney for a maximum of $250 USD.

Fees and Taxes

When buying property in Belize, you can expect to encounter the following fees:

• Government Stamp Transfer Tax: a little under 5% of the purchase price.
• Attorney's fees: 1-2% of the purchase price.
• Title search fee (through an attorney): $250 USD.
• General Sales Tax (for new residential properties): 12.5% of the purchase price.

After negotiating a price, a deposit of 10% is typically paid, and the property is taken off the market.

Additional Costs

In addition to the above fees and taxes, there are other costs to consider when buying property in Belize. These include:

• Real estate agent fees: typically between 2-5% of the property value.
• Property taxes: these are very affordable in Belize, with properties worth $250,000 USD on Ambergris Caye attracting an annual property tax of under $375 USD. In rural areas, property taxes can be as low as $6 USD per year.
• Business tax on rental properties: a flat rate of 3% payable to the Belize Tax Services Department on monthly receipts from rent, royalties, premiums, or any other receipts from real property that is BZ$800 or more.

Financing

It is worth noting that getting a mortgage loan from a bank in Belize can be challenging for non-residents, so it is advisable to be prepared to pay in cash or obtain financing from a non-Belizean financial institution.

Overall, while the costs of buying property in Belize are relatively low compared to other countries, it is important to be aware of the various fees, taxes, and potential additional costs involved in the process.

The risks of buying property in Belize

Belize is an attractive prospect for overseas property buyers, with its growing economy, tax incentives, and favourable foreign ownership laws. However, there are several risks to be aware of before investing in property in Belize.

Scams and Fraud

Belize has a problem with real estate scams and fraud, including forged signatures, false witnesses, and identity theft, and fake escrow companies. It is important to be cautious and do your due diligence when purchasing property in Belize, including performing background checks on sellers and cross-referencing land titles at the Land Registry.

Political and Economic Stability

Political unrest in Central America can be a concern for potential buyers, and there is a risk of graft and corruption. Additionally, Belize's economy is heavily dependent on tourism, which can be disrupted by events such as hurricanes.

Squatters and Vandalism

Squatting is a common issue in Belize, especially on unused land. It can be challenging and costly to evict squatters, and politicians may get involved in these matters. It is important to take steps to prevent squatting and vandalism if you are not planning to be a year-round resident.

Construction Standards

Belize's construction standards are not as stringent as those in the US, and there is a lack of government oversight. It is important to do your research and consult with locals and experts before purchasing property to ensure it is in sound condition and meets zoning and hurricane requirements.

Limited Financing Options

While it is possible to obtain financing for a property purchase in Belize, the options may be limited. Local banks typically offer loans with high-interest rates and short fixed terms. It may be more feasible to seek financing from your home country, especially if you have a good credit score.

High Costs and Fees

In addition to the purchase price of the property, there are various costs and fees to consider, such as legal and closing costs, transfer taxes, and attorney fees. These can add up to a significant percentage of the property's value.

In conclusion, while buying property in Belize can be a smart investment or a dream come true for some, it is important to be aware of the potential risks and take steps to mitigate them. Doing your research, seeking professional advice, and being cautious can help ensure a successful and secure property purchase in Belize.

The requirements for buying property in Belize

Citizenship and Residency

Belize allows non-citizens and non-residents to purchase property, including condos and homes, with no restrictions. You do not need to be a citizen or resident to own property in Belize, and you don't even need to be in the country to complete the sale.

Finances

You will need to show proof of finances when making a bid on a property, on top of your initial down payment. You will always be required to prove that you can afford the property before the paperwork will be processed.

It is recommended that you do all real estate land transactions through a licensed Belize real estate agent or an ethical Belize attorney-at-law. You need to ensure that a Title Search is conducted at the Government Land Registry and that the property is free and clear of all liens, judgments and encumbrances.

Closing Company

Once your offer has been accepted by the seller, the agreement will go to a Closing Company, which will do all the due diligence, title search, and transfer of property.

Stamp Duty

A 5% Stamp Duty must be paid to the Government of Belize to transfer the property's title to your name. The first $10,000 of the purchase price is completely tax-free.

Transfer the Title

After the Stamp Duty is paid, you will need to wait for the title to be transferred into your name. This can take a minimum of 30 days, but it could be up to 60 days or more.

Additional Considerations

• It is common for land transactions and land purchases to be done through a corporation (IBC or Chapter 250) for tax advantages.
• It is advisable to be prepared to pay in cash, as getting a mortgage loan from a bank in Belize can be challenging for non-residents.
• It is common to buy land or building lots under an Agreement for Sale or Contract for Deed, where the seller retains the title to the property until it is paid in full. This arrangement allows the buyer to purchase the property over time, typically through instalment payments.
• If you are buying property as an investment or future retirement home, you can hire a property management company to rent out your property when you are out of the country.
• Property taxes in Belize are very affordable.
• It is advisable to consult with a real estate attorney who is familiar with the property laws in Belize.

The process of buying property in Belize

Step 1: Begin the Search

As with any good investment, research is key. You can browse current property listings in Belize on local realtors' websites, bank foreclosure listings, and by speaking to locals. It's worth noting that not every property may be listed with a realtor, so it's worth exploring different parts of the country to get to know what's available.

Step 2: Choose a Property to Suit Your Needs

Belize has diverse options when it comes to real estate. Whether you're looking for a property tucked away in the hills or one that's right on the beach, it's important to define what you're looking for and your budget.

Step 3: Make an Offer to Purchase

Once you've found your ideal property, your realtor will draft an "Offer to Purchase" letter, which includes buyer and seller details, the legal description of the property, the purchase price, and your signature.

Step 4: Negotiate with the Seller and Provide a Deposit

The seller may accept your offer, or they may respond with a counter-offer. Once the price is mutually agreed upon, both parties will sign the offer, and you will need to provide a deposit as a goodwill gesture.

Step 5: Hire a Lawyer and Conduct a Title Search

Although hiring a real estate lawyer is not mandatory, it is highly recommended to save you time and money. Your lawyer will conduct a "Title Search" to ensure the property has no mortgages, liens, or unpaid taxes, and will also request a "Survey Plan" for the exact location and dimensions of the property. Lawyer fees typically range between 1-3% of the sale price.

Step 6: Sign a Purchase Agreement and Pay

After the necessary research is done, your lawyer will write a Purchase Agreement, a more detailed version of the "Offer to Purchase." Once both parties accept the terms of the sale and sign the document, you will need to pay the purchase price in full. If you don't have the cash on hand, there are local and offshore banks that can offer loans at reasonable rates.

Step 7: Pay Stamp Duty

A 5% Stamp Duty must be paid to the Government of Belize to transfer the property's title to your name. While your lawyer will handle this payment, it's important to know that the government has the right to value the property and charge you based on their evaluation, not the purchase price. The first $10,000 USD of the purchase price is tax-free.

Step 8: Transfer the Title

After the Stamp Duty is paid, you'll need to wait for the title to be transferred to your name, which can take a minimum of 30 to 60 days or more. Once the title is in your name, congratulations! You now own a piece of Caribbean paradise!

Additional Considerations:

• It is recommended to do all real estate transactions through a licensed Belize real estate agent or an ethical Belize attorney-at-law to avoid scams and ensure a smooth process.
• Getting a mortgage loan from a bank in Belize can be challenging for non-residents, so be prepared to pay in cash, secure owner financing, or obtain financing from a non-Belizean financial institution.
• There is no Capital Gains Tax in Belize, so if you sell your property for a profit, you keep all the profits.
• Property taxes in Belize are very affordable, with houses or condos worth $250,000 on Ambergris Caye attracting an annual property tax of under $375.
• Consider purchasing property through an International Business Company (IBC) to take advantage of tax optimization laws and added layers of asset protection.
• Most real estate transactions in Belize are cash sales, but there are opportunities for seller or vendor financing, especially for land purchases.
• Remember to consult with experts for all your property management needs before selling or purchasing property in Belize.

Frequently asked questions