Five things to know before buying property in Belize

Buying a property is always a stressful process and it can be even more so when buying in a foreign country. However, Belize is part of the British Commonwealth with a legal system that shares the same British common law as Canada and the United States. However, there are five basic things that every buyer should know before beginning the process of buying his or her dream property in Belize:

1. A foreigner can own property in Belize outright and has the same rights as a Belizean citizen to own the property as their own. Since the Foreign Land Tenure Act was abolished in 2001, no licenses, permits, special permits, or conditions are needed for a foreigner to obtain freehold title to land in Belize.
2. It is always advisable to have professional legal advice when buying a property, although you will often be told otherwise. There are reputable and experienced paralegals who will be familiar with the title history of local properties and can often finalize a purchase. However, there can be significant issues related to the best way to take title that can affect your closing costs and potentially affect how you sell your property. Don’t risk it, get qualified local legal representation.
3. Title insurance is very common in the US and increasingly in Canada, but not as common in Belize. However, Belize is one of the few Central American countries that actually offers title insurance through one of the leading US providers, Stewart Title. It is important to note that the Government of Belize guarantees most Belizean titles, while your local attorney can provide a title opinion that makes purchasing property as secure of title as it is in the U.S. USA and Canada.
4. Closing costs in Belize are very easy. Since there is no capital gains tax associated with the purchase and sale of real estate, the Government levies a 5% stamp duty on the stated purchase price of the property at the time of title transfer. However, there is an additional tax of 5% for foreigners and people who have resided in Belize for less than 3 years. It is important to fully review and understand your options before completing the sale to ensure you take title to your Belize property that best suits your particular circumstances. Closing fees for your attorney or paralegal should be budgeted at a minimum of $500 – $1500.
5. Local funding, although available, would not be a recommended course of action. Most foreign property transactions are done in cash or financed abroad. Belizean interest rates are often much higher than what you will be used to in your local markets with fixed terms of only twelve months and only issued in Belizean dollars. At the end of each year, the loan is paid off and then renewed at the current interest rate. A more reasonable alternative may be to borrow through an offshore banking institution and, as always, professional advice is very important.

Common sense should prevail when contemplating the purchase of property in any foreign jurisdiction and that should start with hiring an advisor who will stand on your side and not commit to also acting on behalf of the seller. Start by following the five factors above and you will go a long way in making this an exciting and joyous experience.