Buying property is always a stressful process and can be even worse when buying in a foreign country. However, Belize is part of the British Commonwealth with a legal system that shares the same common English laws as Canada and the United States. However, there are five basic things every buyer should know before they begin the process of buying their dream property in Belize:
- Foreigners can own property directly in Belize and have the same rights as citizens of Belize to own property for free. Since the Alien Landholding Act was abolished in 2001, no license, permit, special permit or condition has been required for a foreigner to take title to property in Belize.
- It is always advisable to have professional legal advice when buying property although you will often be told otherwise. There are experienced and reputable paralegals who will be familiar with the local property ownership history and they can often complete a purchase. However, there may be an important issue about how best to retrieve a title that could affect your closing costs and potentially affect how you sell your property. Don’t take any risks, get a qualified local legal representative.
- Title insurance is very common in the US and increasing in Canada but not so common in Belize. However, Belize is one of the few Central American countries that actually offers title insurance through one of America’s premier providers, Stewart Title. It is important to note that the Belizean Government guarantees most Belizean degrees while your local attorney can provide a property rights opinion which makes purchasing a property safe in relation to your property rights as in the US and Canada
- Closing costs in Belize is very easy. Since there is no capital gains tax associated with the purchase and sale of real estate, the Government imposes a 5% stamp duty tax on the purchase price of the property announced at the time of transfer of title. However, there is an additional 5% tax for foreigners and persons who have lived in Belize for less than 3 years. It is important to fully review and understand your options prior to finalizing a sale to ensure you take the title to your Belize property that best suits your particular circumstances. Closing costs for your attorney or paralegal should be budgeted at least $500 – $1500.
- Local financing, even if available, would not be a recommended course of action. The majority of foreign property transactions are cash or financed overseas. Belizean interest rates are usually much higher than you would be accustomed to in your home market with a fixed term of only twelve months and issued only in Belizean dollars. At the end of each year the loan is closed and then renewed at the current interest rate. A more reasonable alternative might be to borrow through an offshore banking institution and, as always, professional advice is essential.
Common sense needs to come first when considering buying property in any foreign jurisdiction and that should start with keeping an adviser on your side and not compromising by acting for the seller as well. Start by following the five factors above and you will make this an enjoyable and enjoyable experience.