Steps for buying property in Barbados

Buying a property for the first time can be an exciting and overwhelming experience all at the same time, especially if you are not familiar with the process involved.

If you are planning to buy a property in Barbados, we have compiled some of the basic steps involved:

1. Get Pre-Qualified: Before you start searching for a property, it is essential to determine your budget. The best way to do this is to become pre-qualified by a financial lender. Many banks in Barbados are now offering this service and we highly recommend taking this initial step to provide a smooth journey towards purchasing your property.
2. Choose your real estate agent: An important step in buying property in Barbados is to find a reputable real estate agent. They will help you find properties that meet your criteria, negotiate the price and guide you through the legal process.
3. Choose your property: Once you have found a real estate agent, it’s time to choose your property. Make sure you take the time to view a variety of properties and consider factors such as location, size, and price.
4. Make an offer: After you have found the property that meets your criteria, you will need to make an offer. Once its accepted, an Offer and Acceptance form will be provided by your realtor that includes the price you are willing to pay, any contingencies, your financial provider etc.
5. Advise your lender: If you’re using the services of a financial institution, make contact with your representative to advise them on your accepted offer to purchase the property. Provide them with the requested documentation and confirm the fees and costs involved with securing financing.
6. Hire your attorney: Before you can close on the property, it’s necessary to hire a reputable attorney to transact the conveyance of title and conduct due diligence on your behalf. This will include but not limited to: a title search to ensure there are no liens or encumbrances on the property, a survey to confirm the boundaries, recording of the deeds and certified survey plans at the registry of title. They will prepare the Sale Agreement and other legal documents. Attorney’s fees are approximately 2% – 2.5% plus 17.5% VAT of the sale price.
7. Closing of Sale: Once all conditions have been met and the due diligence process is complete, it’s time to close. This involves signing the Sale Agreement, viewing boundary lines if any, paying the 10% deposit, and transferring those funds to the seller’s attorney.
8. Completion of Sale: Once all the paperwork is finalized, you will then be required to pay the balance of the purchase price and the property will be transferred and registered into your name.

Points to consider: It’s worth noting that there may be additional fees and taxes involved in the process of buying any property, so it’s important to budget for these accordingly. *Please see some below:

• Recommend asking any necessary questions before signing the sale agreement or making a deposit.
• Do your due diligence with checking the property prior to purchasing or conducting test holes should it be a parcel of land
• Purchasing a property takes time, on average a sale may close 3 months after signing the sale agreement and payment of the 10% deposit. In some cases it may take longer depending on unforeseen circumstances.
• If purchasing a home, ensure that your attorney provides you with the transferal letters for the Barbados Water Authority and Barbados Light & Power. The service provider for telephone, wife etc. have different requirements. Suggest you contact your preferred provider to find out those details.
• *Some additional fees when purchasing:-
• Valuation of property being purchased. (Your lender usually has an approved list of valuers that you choose from to conduct this valuation)
• Valuation on your property if it is being used as collateral (Your lender usually has an approved list of valuers that you choose from to conduct this valuation)
• Government 1% Stamp Duty
• Bank fees
• Depending on the lender, they may request a life insurance policy to secure the financing.
• Bank’s attorney’s fees if a mortgage is required.
• Your attorney’s fees
• Property Insurance for the new property
• Land Tax – which is pro-rated based on closing date.

There is no Property Transfer Tax for buyers.

OFFSHORE MORTGAGES

• Local Mortgage Repayment Time: Up to 30 years or until the borrower reaches 65 years of age
• Non-National Mortgage Down Payment: Typically between 30% to 50%
• Non-National Mortgage Repayment Time: Maximum of 15 years
• Mortgage Commitment Fee and Negotiation Fee: Ranges from 0.5% to 3%
• Life Insurance: Mandatory for mortgage approval
• Annual Property Insurance: 0.4% for residential, 0.6% for commercial, and 0.9% for hotels (rates may vary based on property location, value, and use)

OTHER IMPORTANT POINTS TO CONSIDER:

1. No restrictions for non-nationals buying property in Barbados.
2. Foreign currency and non-national mortgages must be registered with the Central Bank of Barbados.
3. No Capital Gains Tax in Barbados; investors are not taxed on property value appreciation.

LAND TAX RATES:

• Improved Residential Land:
  • 0.0% up to $150,000
  • 0.1% on value exceeding $150,000 up to $450,000
  • 0.7% on value exceeding $450,000 up to $850,000
  • 1.0% on value exceeding $850,000
• Improved Non-Residential Land: 0.95% on improved land with buildings other than residences
• Vacant Land:
  • 0.8% on site value less than 4,000 sq. ft.
  • 0.9% on site value over 4,000 sq. ft. up to $450,000
  • 1.0% on site value over 4,000 sq. ft. valued over $450,000

Explore our listings to find your next home. Start your real estate journey with us, guidance you can trust.

_{Content Disclaimer: The information provided above is for informational purposes only. This content does not constitute advice, and professional guidance is recommended before making any decisions based on this information. Island Life Realty disclaims any liability arising from reliance on the contents of this post.}