Buying Real Estate
Belize real estate values have been steadily going up during the past ten years. This trend continues and any property purchased now at a fair price will most likely be an excellent investment for short and medium term planners. Image: Real Estate on the Placencia waterfront.
This is is one of the few countries in the world where foreigners enjoy the same right as nationals in land ownership and tenure – and land rights on the beach are not difficult to obtain. All land purchases are subject to a Government Stamp Transfer Tax which at 2014 is a little under 5% of the purchase price. But before you decide to buy, please check out our Top Ten Reasons To Retire In Belize.
A little-known benefit for those wishing to invest in real estate here is that there is no Capital Gains Tax. So if you purchase land, then sell it later at a good or humongous profit, you pay no Capital Gains Tax – all profits remain with you. See more information on helping you with real estate taxes on Offshore Banking. Condos are a growing part of the real estate market and the country has modern legislation to handle this kind of property ownership based on the well recognized strata principle used in first world jurisdictions.
Real Estate – Some Basic Tips
Among the many attractions of Belize, none is more important to prospective retirees and expatriates than the relatively low cost of property and housing. For sure you can spend a lot of money on North American-style luxury developments. But you can also buy raw land at prices not seen in the U.S. since the 1960s and in some areas find a simple but pleasant rental house near the sea for under US$200. a month.
Like anywhere in the world, local Belize real estate scams do exist. Be wary of fast-talking real estate brokers, attorneys or anyone making a high pressure pitch. Do not be afraid to walk away or take your own deliberate time on any real estate transaction. Do not be swayed by who the real estate agent is. Most real estate agents in Belize are immigrants from North American who have literally taken over this business from Belizeans. You may understandably feel more comfortable with someone who looks like you, talks like you, and likely is from your own country. Caveat emptor: con artists come in any range of colors and nationalities.
Scams can also come after a purchase. This is usually done by an individual or real estate management company hired to look after or supervise construction on your property. Not a few absentee land owners do not realize they have been scammed until they make a surprise visit to check on their home under construction and discover their monies have been diverted elsewhere.
It is recommended that you do all real estate land transactions through a licensed real estate agent or attorney. You need to ensure that a “Title Search” is conducted at the Government Land Registry and that the real estate that you are purchasing is free and clear of all liens, judgments and encumbrances. A title search done through a local attorney should not cost you more than U.S. $250. The real estate market in here is not tightly regulated, thus we recommend that all property purchased must have a Title Search by an attorney at law, NOT affiliated with your real estate agent, completed before you enter into any contract or make any deposit.
One of the best ways to avoid being ripped off and get a better price, is to try and find the owner of the property you are interested in and cut out the middleman - the real estate agent. You can do this by scouting the property and talking to neighbors, maybe assisted by your taxi driver. Then hire a recommended Belize attorney-at-law to arrange the title search, negotiate and purchase direct from the owner. Going rates for buying property through a Belizean attorney at law are between 2 and 5 per cent of the property value. A real estate agent will charge more and is really working for the owner and himself to get a high price and commission.
If you are looking to save even more money you can hire a local land facilitator. These are usually retired government employees who have worked in the lands department and know the inner workings of this bureaucracy. They are also known as land fixers. But be very selective and always ask a number of locals or expats for recommendations. Expect to pay half the rate an attorney or real estate person will charge. Attorneys and real estate agents often employ these same “fixers” to process documents for them. We always recommend using an attorney-at-law to finalise your real estate purchase in Belize. Belize attorneys have very high legal and fiduciary ethics that they must follow. Realtors and real estate agents can be anyone from an honest professional to a tree-shade land peddler from the U.S. operating illegally out of his or her home on a visitor's permit.
The preferred way of owning real estate is through Title Free and Clear, either as an individual or through a corporate body. The property can be mortgaged with a bank or credit union. Titles Free and Clear, are issued for land and condominiums. Condominiums are purchased through a “Strata” title.
Property prices are generally quoted in U.S. dollars.
Purchasing a property is pretty straightforward – the time for completion is usually 30 to 90 days.
Real Estate Financing
Foreigners can obtain financing in U.S. dollars from local offshore banks. The maximum you can borrow is between 60 and 80% of the value of the property. Rates are about 8.5% to 12% interest. Most foreigners purchasing real estate pay cash from their own money, or borrow funds in their home countries where interest rates are lower. One advantage of financing your real estate purchase through a local bank is that the bank will have in-house attorneys and procedures to protect its loan portfolio and this includes due diligence checks on the real estate transaction.
Another option to purchase real estate is through owner financing where the seller provides part financing for the buyer, Conditions are flexible but an owner financed transaction usually sees the buyer putting down 30% cash and the owner finances the balance at rates of between 6 to 8 per cent over a five or ten year period. 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 and pretty much have tenants pay for most of the cost of the purchase. As stated previously, consider using a local attorney-at-law to review and sign off on any owner financing agreement.
Property taxes in Belize are very affordable. A house or condo worth U.S. $250,000 on Ambergris Caye for example attracts an annual property tax of under U.S. $375.00. Some wise investors choose to invest in real estate in rural areas where taxes are ridiculously low.
How low? A Library of Congress employee locally known as Four Dollar Charlie, recently shared with us his annual Belize property tax return. The annual property tax on his mansion hideout in Succotz – a village near Belize’s western border popular with American expats who do not mind having property in a Maya village as long as it is cheap – runs him U.S. $4.00 per year. No, we are not making this up. 2014 Edit: Four Dollar Charlie recently complained that his annual property tax has been raised to U.S. $6.00 year. So it is now Six Dollar Charlie.
Real Estate Locations
The same rules of thumb that apply when looking for a home, land or apartment in North America apply in Belize: The old and tested rule is still location, location and location in determining price. Demand drives prices. Image: Hopkins by the sea in the south.
Many people, visitors – this includes Belizeans – dream of living on the beach, thus beach front property is in great demand, and prices are at a premium compared with similar property inland or a couple streets behind the beach.
Real estate prices are highest on Ambergris Caye which is already regarded as being almost overrun with tourists and expats but which has the attraction of the Barrier Reef and close proximity to the International Airport at Belize City. Prices are more reasonable in the south, especially in the Placencia Peninsula and nearby areas such as Sitee River. This area has far more land available for development and is accessible by road or air. An international airport is currently under construction. We recommend spending a few days to visit and tour areas at leisure to get your bearings and see what area would more appeal to your tastes and needs. Be brave and knock on doors or expats in the areas to try and get their perspective on what life is really like in Belize.
Some expatriates like to settle in areas close to the border with Mexico or Guatemala. This makes it easy to cross over by highway to a different country for a day or weekend trip and savor different cultures, access to malls and a wider range and lower prices for food, entertainment and other services in a first world country.
Corozal Town in the North (bordering Mexico), and the Cayo District in the West (bordering Guatemala) are popular for expatriates retiring here. The construction of the last few miles to link the southern highway with Guatemala will create another attractive area to purchase real estate abutting Guatemala’s attractive Izabal Department with its attractions of Puerto Barrios and the Rio Dulce, and a comfortable drive to Honduras.
Remember another rule – in real estate you always make your money when you buy, not when you sell. The more information you have, more likely a better price you’ll get.
Looking For Foreclosures
Until recently, it was difficult for prospective home buyers not living in Belize to find foreclosures as these would only be published in local newspapers and not on their online versions. But some banks such as Scotia Bank and the Belize Bank, now publish foreclosure notices on their websites. This can be a useful resource to help scout for properties. But do not expect spectacular savings. By law, banks are required to dispose of foreclosures at near fair market value in order to protect the consumer. But identifying a property by this method, can open the door with the bank which may be inclined to help you finance a non-performing mortgaged property they are trying to get off their books. And again, this is another opportunity to cut out the middle man Belize Real Estate Agent from the buying process.
Article updated 21 June 2014.
Part Two: Real Estate Agents Directory