Buying Real Estate & Property in the British Virgin Islands from Ultimate BVI

Buying Property or Land in the BVI

Buying property in the British Virgin Islands requires time and commitment on the part of the buyer - but it is possible to own your own little piece of paradise in these un-spoilt islands.

What will it cost?

The British Virgin Islands are made up of a relatively small land area and therefore there is only a finite amount of land available. For this reason land tends to be more expensive in the British Virgin Islands than on some of the other larger Caribbean islands.

Are there any rules about buying land or property there?

BV Islanders and ‘Belongers’ have the first choice of any property or land for sale. Anyone else, including British Citizens, are considered as non-belongers.

In order for a non-resident to purchase and own property in the British Virgin Islands, whether it be land, a home, multiple dwellings or a business or commercial venture, it is necessary to obtain an Alien Landholding License.

Agreements to purchase property are therefore entirely reliant upon such a license being granted by the Government to the purchaser.

Bear in mind that the Alien Landholding License is an entitlement to own a specific property and is non-transferable.

How do I apply for this license?

The application for the Alien Landholding License is submitted to the Ministry of Natural Resources and Labour.

Each person whose name appears in the Application Form will be required to pay US$200.00. Each company that appears on the Applications Form is required to pay US$300.00. Additionally, each person or company is also required to pay US$600.00 on the approval of the License.

The application for an Alien Landholding License must be accompanied by:

Two character references
Two financial references from the applicants bank, employer or accountant which must indicate the applicant’s ability to purchase and develop the property
A financial statement covering one years banking record
A police certificate of good standing
A passport size photo of each applicant
Four consecutive newspaper advertisements for the property
A letter sized cadastral survey showing the land and surrounding properties
A valuation report form a licensed surveyor plus other supporting documentation

Anything else I need to know?

To purchase a property (as a non British Virgin Islands citizen) it must be advertised locally for four consecutive weeks in a local paper prior to submission of the Licence Application to Government.

If you are purchasing land, you will be required to enter into a commitment to develop the land within a three year period or less. The development commitment will be calculated by the government based on environment and other planning considerations and the acreage of the land being purchased, with the development commitment for a single family home being generally not less than US$250,000.00

Where an owner fails to honour the development commitment, the government is entitled to fine the buyer up to 40% of the sales price. Additionally, the owner is only allowed to sell the property once the development commitment has been completed.

The purchase of developed property for residential purposes will generally not incur a development commitment. The objective of the licensing regulations is to prevent speculation on undeveloped property.

Applications for all licenses are referred to the Executive Council for approval. The typical Alien Landholders License will usually take 8 months to obtain, with longer periods not at all uncommon.

Can I rent the property out?

A property may only be rented, following approval by the Executive Council as part of the Alien Landholders License application, and the granting of a Trade Licence.

Such approval by the Executive Council will be stated on the Licence and will automatically grant approval of the relevant Trade Licence, which needs to be renewed thereafter at the fee of US$400 per annum.

Current BVI government policy seems to be against granting non-nationals approval for renting properties. Approvals are becoming increasingly rare and currently, the application for the rental use of a property is unlikely to be approved, unless the property is located in an area where there are already a significant number of other rental properties, or where the property for which the license is being sought already has an established rental history.

What is the tenure situation?

The majority of land in the British Virgin Islands is owned in fee simple. A purchaser will normally acquire absolute title, which is registered in the British Virgin Islands Government Land Registry.

Registered titles relate to a detailed cadastral survey, which defines legal boundaries. No transfer of land can take place unless the boundaries of the property have been determined to the satisfaction of the Registrar of Lands.

Property in the British Virgin Islands may also be held on long lease from the Crown or private individuals. The leases term is normally 99 years or the unexpired term in the case of an assignment of a lease. For practical purposes a purchaser of such a leasehold interest will enjoy all the benefits of an absolute title for the duration of the lease.

What about real estate taxes?

On the transfer of title to a property Stamp Duty at the rate of 12% of the price or appraised value is payable by the purchaser. This rate was recently raised in January 2006 from the old rate of 8%.

Land Tax of $50.00 is paid annually for any land under a half of an acre. For any land above half an acre there is a standard charge of $150.00, plus $50.00 for each additional acre.

House Tax is also levied annually at the rate of 1.5% of the assessed annual rental value.

Who is in charge of planning and building controls?

Development in the British Virgin Islands is controlled by Planning Guidelines, which determine general policy. Development work must be approved by the Land Development Control Authority, which is concerned with planning matters and by the Building Authority who are responsible for ensuring that building conforms with the building code guidelines.

It is preferred if working drawings submitted to these Authorities are prepared by architects based in the British Virgin Islands.

What are building costs like?

Buildings in the British Virgin Islands (and generally throughout the Caribbean) have to be able to withstand the forces exerted by earthquakes and hurricanes, and therefore normal construction methods call for reinforced concrete floors and foundations, reinforced concrete masonry walls and secure roofs. Most homes also have a reinforced concrete cistern for storing potable water (caught from the roof) and their own septic tank.

Building costs to meet the above requirements generally vary from $180 to $300 or more per square foot, depending upon the type of structure to be built and the standard of finishes used. Swimming pools typically cost from $25,000 and upwards to construct.

The British Virgin Islands has many first class architects and contractors, capable of building anything from a small vacation home to a large mansion.

Architects fees vary according to their level of involvement, responsibility and the complexity of the work. Fees for design are usually start around 6%.

Before employing an architect, it is wise to hire the services of a Project Manager. The Project Manager will be able to assist you in finding the architect best suited to your project and will supervise progress of the architectural design and the construction of your home.

There are a number of chartered project managers in the British Virgin Islands who can assist you.

Most building materials are available on the island; however with a larger project, it is usually cheaper to have your Project Manager arrange for the materials to be directly imported. The duties on imported directly are generally between 5% and 20%.

Typically a house will take 9 to 18 months from the initial planning stage to completion.

There are no restrictions in the British Virgin Islands against an owner building his own house and employing sub-contract workers, providing the BVI labour codes are observed.

What about insurance?

The typical cost for insuring a property in the BVI is 0.75% of the property value per annum. For example a US$700,000 home would cost approximately US$5,250 per annum to insure.