Buying property is always a stressful process and can be even more so when purchasing 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 that every buyer should know before beginning the process of purchasing their dream property in Belize:
- A foreigner can own property directly in Belize and has the same rights as a Belizean citizen to freehold property. Since the Foreign Ownership of Land Act was abolished in 2001, no licenses, permits, special permits or conditions are required for a foreigner to obtain freehold titles to land in Belize.
- It is always advisable to have professional legal advice when purchasing a property, although many times they will tell you otherwise. There are experienced and reputable paralegals who will be familiar with the title history of local properties and can often finalize a purchase. However, there can be significant issues related to the best way to obtain title, which can affect your closing costs and potentially affect how you sell your property. Don’t take any risks, get qualified local legal representation.
- Title insurance is very common in the US and increasingly in Canada, but it is not as common in Belize. However, Belize is one of the few Central American countries that actually offers title insurance through a major US provider, Stewart Title. It is important to note that the Government of Belize guarantees most Belizean titles, while your local attorney can provide you with a title opinion that makes purchasing a property as secure with respect to its title as in the US. USA and Canada.
- Closing costs in Belize are very simple. As there is no capital gains tax associated with the purchase and sale of real estate, the Government levies a 5% stamp duty on the declared purchase price of the property at the time of transfer of title. 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 review and fully understand your options before completing the sale to ensure you obtain the title to your Belize property that best suits your particular circumstances. Your attorney or paralegal’s closing fees should be budgeted at a minimum of $500 – $1,500.
- Local funding, although available, would not be a recommended course of action. Most foreign real estate transactions are conducted in cash or otherwise financed abroad. Belizean interest rates are usually much higher than what you are used to in your local markets with fixed terms of only twelve months and issued only in Belize dollars. At the end of each year, the loan is paid off and then renewed 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 property in any foreign jurisdiction and that should start with engaging an advisor who is on your side and is not obligated to also act 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.
Comment here