Turks and Caicos has no annual property tax on the ownership of real estate, although real estate buyers do need to pay a one-time land transfer tax (stamp duty), which applies to anyone purchasing property. This is due at the time of closing. The exact tax rate varies, based on the price and location of the property.
As of July 1, 2013, the following stamp duty rates apply to the islands of Ambergris Cay, Dellis Cay, East Caicos, Parrot Cay, Pine Cay, Providenciales, Water Cay and West Caicos:
Less than USD $25,000 – no transfer tax
USD $25,000 to $250,000 – 6.5%
USD $250,000 to $500,000 – 8%
USD $500,000 and up – 10%
The rates are structured slightly differently for TCI’s other inhabited islands. Below are the rates for Grand Turk, Middle Caicos, North Caicos, Salt Cay and South Caicos:
Less than USD $25,000 – no transfer tax
USD $25,000 to $100,000 – 5%
USD $100,000 and up – 6.5%
The stamp duty, along with attorney fees and mortgage processing fees, are the only “extra costs” or taxes that need to be paid during the purchase or sale of real property in Turks and Caicos. As was already mentioned, no annual property taxes are imposed either during the ownership of real estate or on the sale of a property, nor are there capital gains, inheritance or luxury taxes. Turks and Caicos also does not require title insurance to be purchased when buying real property, nor are foreign nationals required to have an alien landholder’s license, as is typical of many other Caribbean nations.
The Buying Process
Turks and Caicos has no restrictions on foreign ownership of real property, and foreigners do not have to get permission from the TCI government to buy real estate. The process of purchasing real estate is actually quite simple and straightforward. It starts, of course, with engaging the services of a competent Turks and Caicos real estate professional, who will give you an overview of the islands, show you various properties that are on the market, and help you select the right piece of real estate for you.
When you have finalized your property choice, we suggest you meet with your RE/MAX Turks & Caicos Islands sales associate, who will go over the purchase process with you. In a nutshell, the process starts with making a written offer to purchase. This is done via a document that we will put together for you to sign. As is true with real estate transactions in most countries, there may be counter-offers by both the seller and the buyer before the final terms of sale are agreed upon.
Once the seller accepts your offer to buy, we recommend you engage the services of a Turks and Caicos attorney-at-law who specializes in real estate transactions. He or she will handle the purchase process on your behalf and take the proper steps to protect your investment. The local TCI lawyers charge a standard fee of 1 percent of the final selling price of the property.
To secure the transaction, you—the buyer—will need to pay a deposit which is typically 10 percent of the agreed purchase price of the property. This security deposit is paid to your local TCI attorney and will be forwarded to the seller’s attorney, to be placed in escrow until all terms and conditions are met by both parties to complete the deal.
After you’ve wired or delivered your security deposit to your attorney, he or she will prepare a formal sale and purchase agreement that both you and the seller will sign. This agreement spells out the terms and conditions applicable for the purchase of the property. Once this agreement is signed, the seller is committed to sell the property at the agreed upon terms and conditions. A closing date will be set, which is normally around 10 to 30 days after signing the purchase agreement.
During the period between signing the purchase agreement and closing, there are several details you will need to take care of. Your TCI attorney will request that as an international buyer, you provide a copy of a valid passport or identification card, and complete a form giving details of the property purchase as well as your personal details. Buyers must also be able to provide proof of address and provide a proof of funds, along with a bank reference letter, to comply with inward investment guidelines into the Turks and Caicos Islands.
The sooner you can arrange your financing, the better. We actually recommend buyers line up their financing for the property they wish to buy, before making an offer to purchase, as the approval process can take some time. If you are working with a Turks and Caicos financial institution, it can easily take up to one or two months to get a home loan approved, depending on your credit history. Also be advised that if you are getting a mortgage through a TCI bank, you will be required to get an inspection and appraisal of the property you are buying, to make sure it is valued correctly. This is another step that can take some time.
Buyers and sellers do not have to be physically present to perform a final closing; this can be done by courier service with the final payment arriving by wire transfer. As the buyer, the total final payment you will need to make at closing includes the balance of the purchase price of the property, the stamp duty, land registration fees, and your legal fees. In most cases, the seller pays the realtor’s commission and his or her own attorney fees.
The closing funds will be held in escrow until the purchase and sale agreements are registered with the Turks and Caicos Land Registry Department and have been returned to the TCI attorney from Grand Turk. Once in the TCI Land Registry, the property will be assigned a parcel number and the exact location of the parcel will be listed, allowing for a title search to be conducted in the future by law firms, real estate agents or other interested parties.
After the Land Registry documents have been filed, the balance of the purchase price will be released to the seller, and the buyer can take possession of the property. Land title is guaranteed and protected by the British Crown. This not only eliminates the need for title insurance, but also facilitates a smooth transfer of properties from sellers to buyers.