Guide to Property in Belize
Property in Belize
Belize offers plenty of choice both for investors and home buyers. When purchased in the right location and at the right price, Belize offers great opportunities to see significant capital growth, and is an emerging market opportunity.
Many buyers are looking at the growing retiree market, and are choosing to invest either in condominium units on one of the islands, which offers the potential of good income and long-term growth, but also has a much higher entry price. The other option is to buy land in planned communities where the retirees/end buyers can build their own home – this option does not offer you any rental income, but also does not carry any of the hassles that buying a rental property does and you also have a much lower entry price.
Belize does not restrict foreigners when buying property in the country which has seen an influx of buyers, and the tax free environment is perfect to let your investment grow.
What type of ownership am I getting?
All land in Belize is freehold, and you can also back this up by purchasing title insurance at the time of closing.
There are no restrictions on ownership by foreigners, and you may take title using a trust, a local/international company, or as an individual.
Local attorneys can advise you further with regards to forming a local company and the advantages and disadvantages this may provide.
What is the purchase process?
The purchase process in Belize is very simple, and very similar to that of the United States/Canada and the United Kingdom. As Belize was a British colony up until recently, the legal system is based on English Law.
Initially you will be asked to sign a reservation document, and pay a fee – normally, this fee will be 10% of the purchase price, with a minimum fee of $1.500 USD. These funds are sent to either a Belizean law firm, or for your convenience, to a U.S. title company.
Once the reservation fee has been received and the form has been returned, the Belizean attorneys will be in touch with you and prepare the purchase contract, which will be sent to you for review, and also for signatures.
Once you have signed and returned the purchase contract, you will be asked to wire the remaining balance to close to the Belizean attorneys escrow account. They will then go thru a similar process to anywhere else in the world, and verify that the land is owned free and clear, with no mortgages and taxes etc, and subsequently after verifying that, the closing will take place. There is no need to travel to Belize to consummate the transaction – all can be done via Fedex!
Title searches are done in the same way as for a U.S. based transaction, and title insurance is offered at the time of closing as well.
What are typical build costs, and what type of homes are common in Belize?
The building costs in Belize vary with the type of property you are looking for, but in general, count on paying $60 per square foot for a standard site-built property.
The style can best be described as “Caribbean” – one story homes, often with 2 bedrooms and a large patio are the most common in Corozal. A standard home would be approximately 1.000 sq.ft (can be built for around $60.000 USD) they would be built with a rain catchment system (for the water supply) or you could choose to have a well built, the cost of a septic tank is around $2.000 USD as well.
Another very affordable option is purchasing a manufactured home from the Mennonite community (Amish) as these wood houses look great, and are VERY affordable.
What type of infrastructure is available?
Water;
Accessing water is most commonly done by digging a well, although you can also use a rain catchment system, which is easy to set up once the property has been built
Sewer/Septic;
Cost of a septic tank is roughly $2.000 USD
Power;
Power lines are running all along the main areas so connecting to the grid should not be an issue.
Solar power is also increasingly common in eco-friendly Belize, and the preferred option for many environmentally conscious retirees and investors.
Do I need insurance?
No, there is no need to obtain insurance on the property – however, we do recommend that all buyers explore the option of buying title insurance.
What are the taxes in Belize?
When investing in Belize property, it is always good advice to consult a tax expert locally who can help advising you on your specific situation – however, below is some general guidance when it comes to taxes applicable to investing in Belize.
Transfer Tax
Purchaser pays 10% on amounts above $10.000 USD at the time of purchase.
Capital Gains Tax
There is no Capital Gains Tax in Belize. We can also assist you in establishing a local corporation, which would allow you access to banking facilities locally – this is something that can be very attractive, as Belize is knows as a “tax haven” throughout the world.
Property Taxes
Belize uses “millage rates” in the same way the United States does, and it produces some VERY low property taxes. The standard tax on a residential (vacant) land lot that was bought for $15.000 USD would be less than $100 USD per annum.
It is also not customary to pay HOA fees on vacant land in Belize, though the practice is more common in upscale condominium developments.
Income Taxes:
Belizean residents are taxed a flat 25% on their income above $10.000 USD, however, income thru an International Business Company, or income for non-residents, are not taxable in Belize.
Mortgages in Belize
As Belize is still an emerging market with high interest rates, mortgages for foreign buyers are rare. There is a possibility of getting loans from one of the many international banks located in the country, the current LTV is 75%, but the requirements are very strict, so most buyers opt for an all-cash purchase, and raise the funds in their country of residence instead.
As bank rates are still very high, mortgages are also not too common among the “locals” either, though they are becoming increasingly more affordable and availability is a lot better, which is also helping to push Belize real estate values in the country.
Equity Release
Most purchasers in Belize are investing using cash, which can be obtained by doing an equity release on your own home, without having to move out. This is in many cases the most affordable and easy way to obtain financing if you are not in a position to invest with cash.
Not everybody falls into a category and some investors will need to raise alternative finance to equity release or mortgage options. There are other borrowing facilities available to purchasers of investment property in Belize.
Banking in Belize
Belize has become known as one of the world’s premier “safe havens” for offshore banking. Many banks, both local and international, have operations in Belize.
The banks based here do not share information about their customers with any foreign authorities (including the United States) which means Belize has become a very popular choice for entrepreneurs that take advantage of the zero tax treatment of International Business Companies (IBCs) as well as the ease with which a bank account can be opened.
The biggest banks in the country are:
Atlantic Bank – www.atlabank.com Belize Bank – www.belizebank.com and Heritage Bank – www.heritageibt.com.