THE BUYING PROCESS
How to Find Your Perfect Property
Location, style, price, these are a small number of factors many consider when choosing a property to buy. For many people the purchase of property is the Turks and Caicos is their first foreign property purchase. It is important that they are properly advised about the purchase process and all considerations while they are considering their investments options.
Step 1 - The Preliminary Agreement
Once purchasers have identified the property they would like to present an offer on we will prepare a Preliminary Agreement. This will outline the commercial terms upon which the purchase will take place, including price, closing date, conditions, etc.
Step 2 - The Agreement for Sale
When the Preliminary Agreement has been signed the parties will instruct Attorneys to draft an Agreement for Sale. This includes further warranties and is usually when matters of due diligence are investigated. When this has been agreed the deposit (usually 10% of the purchase price) is paid by the Purchaser's Attorney to the Seller's Attorney.
Step 3 - The Transfer
The final stage of the purchase is the Transfer. At Closing the balance of the purchase price will be payable by the Purchaser's Attorney to the Seller's Attorney. Once Closing has taken place and the Transfer is signed by both parties Stamp Duty will be paid and the documents sent to the Land Registry for registration.
DO I NEED A BANK ACCOUNT BEFORE I PURCHASE?
No. Most funds are transferred and held in Attorney's Client Trust Accounts.
DO I NEED A TURKS AND CAICOS ATTORNEY?
I always advise purchasers and sellers to instruct Turks and Caicos Attorneys in their purchase and sale. Purchasers often ask if their US, Canadian or European Attorneys can act for them but their foreign counsel are not qualified in Turks and Caicos law, which governs their purchase and ownership.
IS FINANCING AVAILABLE ON ISLAND?
The short answer is yes, but, this comes with some considerations.
1 - Commercial Banks in the Turks and Caicos are slower to approve loans that in many other countries.
2 - Lending rates are often higher than what people pay in their home country.
3 - Private lenders are available and can make swift decisions but their loan to equity ratio is usually 50% and their interest rate are higher (albeit they should be viewed as bridge financing and not a long term lending solution)
ARE THERE PROPERTY TAXES?
There are no annual property taxes in the Turks and Caicos. There is a Stamp Duty Tax payable at the time of purchase. The rate of Stamp Duty is
On Providenciales and East Cays, West Caicos, East Caicos and Ambergris Cay
$25,000 and under - 0%
$25,001-$250,000 - 6.5%
$250,000-500,000 - 8%
500,001- and above - 10%
On North Caicos, Middle Caicos, South Caicos, Grand Turk and Salt Cay
$25,000 and under 0%
$100,001 and above 6.5%
Stamp Duty is payable on the value fo the land and any physical improvements on the property. The purchase price that is attributable to the contents is not subject to Stamp Duty.
IS THERE ANY RESTRICTION ON FOREIGN OWNERSHIP?
There is no restriction on any individuals owning property in the Turks and Caicos. There is a restriction on foreign corporations directly owing Turks and Caicos property.
COVID 19 STAMP DUTY AMENDMENTS
As part of the Turks and Caicos Islands Government's Stimulus Package purchasers will be in a position to take advantage of the 50% reduction in Stamp Duty that is available until June 30th 2020 which will assist in acting as an incentive to keep the real estate market, an important income generator for the Turks and Caicos Government, moving forward and to generate interest for sellers who wish to sell in the short term.