6 Things to Know When Buying Real Estate in Turks and Caicos
Are you thinking of buying real estate in Turks and Caicos Islands? TCI is a kind of dot on the map that leaves you breathless the first time you visit. So, who could blame you for wanting to turn your fantasy holiday in Turks and Caicos into a permanent reality? And, if obtaining a home in paradise is insufficient to call this an excellent investment, you still get to enjoy its other numerous benefits, such as portfolio diversification, real estate appreciation, and leverage. Finally, it’s a chance to take advantage of its immense popularity and generate passive income and a predictable cash flow by renting to other vacationers when you can’t be there yourself. But let World Real Estate Directory cut to the chase! Here are six things to know to get the project underway!
1. Providenciales is not the only island in the TCI
The island of Providenciales houses most of the Turks and Caicos population due to many spectacular beaches, a wide range of real estate property choices (luxury resorts, vacation homes, hotels, beach houses, and villas), and scheduled international flights. The second most populated and developed island is Grand Turk. It is also the center of the Government and home to Cockburn Town and the capital of TCI. However, although spectacular Providenciales and Grand Turk beaches continue to tempt most visitors and investors from around the globe, consider checking out some other, lesser-known islands. And, if you haven’t already chosen the property that is right for you to meet your objectives and desired vibe, keep your options open.
2. TCI’s real estate market defied the odds
There are many great reasons for buying real estate in Turks and Caicos. They range from the island’s tax haven status across its English-speaking population and US dollar currency to the joy of owning a home in paradise for you and your family to vacation together. The most important thing, however, is a robust real estate market. The location’s attractiveness is indisputable, reflected in the record-breaking figures of the arrivals to TCI shores, year after year, as shown by the islands’ tourist statistics data. But what about the timing and the housing supply and demand?
A four-month country-wide shutdown, travel restrictions, and border closure all account for much of the reduced activity in the market. However, despite the challenges and harshness of the COVID-19 outbreak, the TCI real estate market performed and continues to perform better than many could have hoped for. Luxury real estate properties were highly desired by many affluent buyers looking for a safe retreat. In this respect, the market demand of TCI has shown remarkable resilience, thus encouraging further property listings. Therefore, regarding housing supply and demand, another critical factor to consider before committing to your purchase is whether the market remains generally healthy and robust.
3. TCI boasts a historically low tax environment
TCI’s healthy, pro-business attitude is markedly reflected in the local tax and currency policy. Therefore, one of the best aspects of buying and owning a property on the islands is that there are no direct taxes. This includes income, property, estate, or capital gains tax. Secondly, through the instrumentality of Torrens Land Registration System, the TCI Government guarantees ‘Absolute Title’. Consequently, the fact that you aren’t required to purchase Title Insurance, paired with the affordability of property insurance, makes the cost of owning a property surprisingly low. Likewise, unlike in the Bahamas and other Caribbean jurisdictions, exchange or currency controls exist. The US dollar eliminates the risks of exchange fluctuations (for individuals from US dollar jurisdictions).
However, as a buyer, you are liable for paying the stamp duty, the rates of which vary from 0%-10% based on the value of the property (e.g., the stamp duty for purchase on Providenciales ranges from 6.5%-10%) and the location (e.g., stamp duty isn’t charged for assets under $25,000). Besides the stamp duty, levied one-time during the initial purchase of the property, only “extra costs” that are typically applicable include mortgage processing fees and attorney fees. As for the property prices, they vary considerably according to the location. As one would expect, beachfront real estate demands a premium, and, as you can tell from the stamp duty rates, real estate in Providenciales is higher priced than on other islands.
4. There are no restrictions on foreign real estate ownership
We are happy to inform you that there are no restrictions, specific laws, or rules for overseas buyers investing in TCI real estate. Foreign investment is welcomed here. Moreover, the country treats foreign investors the same as Turks Islanders and residents. Roughly 85% of investors come from North America, mainly from Chicago, New York, Atlanta, Miami, California, Boston, Canada, etc., with the remainder from Central/South America and Europe.
Suppose you are coming to TCI from one of the gateway locations, whether for a short period or moving permanently. In that case, TCI offers direct flights from several major US airports and Toronto, Canada. The expansion of the Providenciales international airport has attracted more overseas buyers and made it possible for them to relocate across the ocean with ease, along with a proper plan and professional moving help. Still, if you plan on staying put, it’s best to inform yourself regarding permanent residency, voting rights, employment, and business ownership restrictions.
5. Citizenship and residency
Buying real estate in Turks and Caicos is possible even without the Permanent Residence status, which is an immigration status that allows an individual to reside in the islands longer than 90 days, and, in some cases, to work. However, for those wishing to make this beautiful place your permanent home, they can get Permanent Resident Certificate (PRC) through investment routes.
However, Turks and Caicos Islander status, i.e., citizenship, is much harder to obtain. Namely, after you’ve been granted PRC and resided in the country for five years, it’s possible to acquire British Overseas Territory Citizenship (the physical passport), which gives you work rights. However, the passport does not allow the holder to vote or open restricted business categories unless you have a separate Turks and Caicos Islander Status. The Turks and Caicos Islander Status gives you rights typically associated with citizenship, although without entitling you to a locally granted passport.
6. The buying basics
Besides helping you examine the market more thoroughly, real estate advisors can also make purchasing a property in Turks and Caicos much simpler. Once you’ve selected the property, you can expect the purchase to involve the following:
- Your signing of a Purchase and Sale Agreement.
- The Initial deposit payment (typically 10% of the purchase price).
- Upon closing, the Buyer’s Attorney receives the transfer Document in exchange for the rest of the purchase price. This Document gets delivered to the Land Registry, which registers you as the property’s new owner, and establishes land value.
- Understanding your paying obligations (stamp duty and the annual fee) as a buyer and the payment structure and process.
The final word
As one can tell, buying real estate in Turks and Caicos is surprisingly simple and opportune. The Government and residents of Turks and Caicos welcome individuals willing to contribute to the islands in developing a prosperous economy and espousing the common purpose of preserving the culture, environment, peace, security, safety, and civil liberties.