Guide to Buying Property in Barbados

Appoint a Certified and Professional Real Estate Agent– When selling property in Barbados, it is best to appoint a professional Real Estate Agent to ensure a smooth sale process from beginning to end. We at H.E.I. Properties will work with the seller to actively market your property and with the buyer for purchase, to reduce the hassle associated with the sale process.

Purchasing Process – The process of buying property in Barbados takes approximately three (3) months to six months, barring any complications.

Stage 1 – Once a Purchaser has made an offer which is accepted by the Seller/Vendor each party will contact their respective Attorney-at-Law to undertake the legal sale process.  The Vendor’s Attorney will prepare an Agreement for Sale to be delivered to the Purchaser’s Attorney for their perusal and approval.

Once this Agreement has been finalised and terms agreed upon, the Purchaser’s Attorney request from his client (the Purchaser) to sign the Agreement and payment of a 10% deposit to be held in escrow by the Vendor’s Attorney until completion of the sale. The Vendor also signs the Agreement, and a copy is kept by each party’s Attorney.

Stage 2 – After the Agreement is signed, the Purchaser’s Attorney completes a search at the Land Registry of Barbados against the property to ensure that the Vendor hold good legal title to the property. The search will also reveal whether there are any encumbrances such as mortgages and other liens, and water and land taxes. The Purchaser’s Attorney also prepares Requisitions to the Vendor’s Attorney requesting additional information on the land such as whether there are any judgements against the land, any encroachments, copy of all title deeds and other requisite enquiries.

Conditional Stage 3 – If the purchaser has obtained funding assistance from a financial institution, that institution will prepare the mortgage deed and deliver the drafted deed the Purchaser’s Attorney for their review and approval. Once the deed has been approved, this document is to be executed by the Purchaser before funds disbursed. If it is a cash sale, this step is not applicable.

Stage 4 – Upon completion of the investigation of title, the Vendor’s Attorney prepares the conveyance deed to transfer title to the Purchaser. At the closing meeting, the Vendor’s Attorney will exchange the original title deeds, the signed Conveyance deed and other legal documents to the Purchaser’s Attorney for the balance of the purchase price. All taxes (water and land) and other debts must be cleared prior to completion.

Costs – There are several costs associated with the sale of property in Barbados including legal fees.

The Vendor pays the following fees:

1. Proportioned Land Tax for the financial year as at the date of closing the sale.
2. • Property Transfer Tax for land is at a rate of 2.5% of the purchase price. If the transaction includes a dwelling house, the amount of BDS $150,000 is exempt from tax.
   • Stamp Duty is payable at the rate of 1% on the purchase price.

Legal Fees –  Generally, each party to the sale covers their individual legal fees.

Rate of Fees together with 17.5% Value Added Tax.

Vendor:                       Up to $25 000                        $ 750

On the next $75 000               2%

On the next $100 000             1.5%

On the next $300 000             1.25%

Thereafter                               1%

Purchaser:                   Up to $25 000                        $1 000

On the next $75 000               2.5%

On the next $100 000             1.5%

On the next $300 000             1.25%

Thereafter 1%

Registered land two-thirds of the scales above.

Agent Fees – payable upon completion of the sale at the usual rate of 5% plus Value Added Tax.

 

 

 by Alexandria L. Thomas Attorney-at-Law