Five things to know before buying property in Belize

May 28, 2021 0 Comments

Buying property is always a stressful process and it can be even more stressful when buying in a foreign country. However, Belize is part of the British Commonwealth with a legal system that shares the same British common law as Canada and the United States. However, there are five basic things every buyer should know before starting the process of buying their dream property in Belize:

  1. A foreigner can own property directly in Belize and has the same rights as a Belizean citizen to absolute property. Since the Foreigner Land Tenure Law was abolished in 2001, no licenses, permits, special permits or conditions are required for a foreigner to obtain full title to land in Belize.
  2. It is always advisable to have professional legal advice when buying property, although you will often be told otherwise. There are experienced and reputable paralegals who will be familiar with local property title history and can often finalize a purchase. However, there can be significant issues related to the best way to get the title, which can affect your closing costs and potentially affect the way you sell your property. Don’t risk it, get qualified local legal representation.
  3. Title insurance is very common in the US and increasingly in Canada, but not as common in Belize. However, Belize is one of the few Central American countries that actually offers title insurance through one of the leading US providers, Stewart Title. It is important to note that the Government of Belize guarantees most Belizean titles, while your local attorney can provide an opinion on the title that makes the purchase of a property as secure with respect to its title as it is in the USA and Canada.
  4. Closing costs in Belize are very straightforward. Since there is no capital gains tax associated with the purchase and sale of real estate, the Government imposes a 5% stamp duty on the declared purchase price of the property at the time of title transfer. However, there is an additional 5% tax for foreigners and people who have resided in Belize for less than 3 years. It is important to fully review and understand your options before completing the sale to ensure that you take the title to your Belize property that best suits your particular circumstances. The closing fees for your attorney or paralegal should be budgeted at a minimum of $ 500 – $ 1500.
  5. Local funding, although available, would not be a recommended course of action. Most foreign-owned transactions are in cash or financed abroad. Belize’s interest rates are usually much higher than what you will be used to in its domestic markets with fixed terms of only twelve months and are only issued in Belizean dollars. At the end of each year, the loan is canceled and then rolled over at the current interest rate. A more reasonable alternative may be to borrow through an offshore banking institution and, as always, professional advice is very important.

Common sense should prevail when contemplating the purchase of a property in any foreign jurisdiction and that should begin with hiring an advisor who is on your side and who is not compromised by also acting on behalf of the seller. Start by following the five factors above and you will go a long way toward making this an exciting and joyful experience.

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