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.
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 2015 is a little under 5% of the purchase price.
A little-known benefit for those wishing to invest in real estate is that there is no Capital Gains Tax. So if you purchase land, then sell it later at a good profit, you pay no Capital Gains Tax – all profits remain with you. 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.
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 is 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, AND 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. As with any profession, there are crooked attorneys in Belize. And likewise, many crooked real estate brokers, especially those in the luxury real estate segment. Some of our clients suggest avoiding real estate brokers associated with international franchises. Here you will find no end of brokers flying under the flag of foreign real estate franchises. Your mileage may vary and may very well go to paying those nose-bleed franchise fees. Ask around, get recommendations and consider our recommended attorneys in the Belize Attorney page. Going rates for buying property through a local attorney 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 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. 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 a vetted attorney-at-law to finalize your real estate purchase. Belize attorneys have legal and fiduciary ethics that they should 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 to protect its loan portfolio. But the attorney for the bank will always have the bank’s interests foremost, not yours. Consider hiring an attorney not associated with the lending institution to review your loan mortgage documents.
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. Consider using a local attorney 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 located in rural areas where taxes are ridiculously low.
How low? A Washington D.C. Library of Congress employee known locally 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 – Four U.S. Dollars a year. 2016 Edit: Four Dollar Charlie recently complained that his annual property tax has been raised to U.S. $6.00 a year. The villagers are upset. He really does not care. He is adding a third floor on his rental property.
Most immigrants dream of living on the beach and beach front property is in great demand, with prices at a premium compared with similar property inland or a couple of streets behind the beach.
Real estate prices are highest on Ambergris Caye which is regarded as being almost overrun with tourists and expats but which has the attraction of the Barrier Reef. Prices are more reasonable in the south, especially on 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.
Some expatriates like to settle in areas close to the border with Mexico or Guatemala. This makes it convenient to cross over by highway to a first world country for a day or weekend trip and savor different cultures, access to malls and a wider range and lower prices for food, medical attention, entertainment and other services.
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 in Guatemala, and a comfortable drive to Honduras.