The British Virgin Islands

Guide to buying property in
The British
Virgin Islands
The British Virgin Islands
Contents
The Non-Belongers Land Holding License (NBLHL) 4
Procedure for Purchasing Property 7
Building Your Property and Living in the BVI 8
Financing a Purchase 8
Building a House 9
Planning and Building Control 9
Property Taxes 9
Utilities and Services 9
Work Permits and Trade Licences 9
Immigration 9
At a glance 10
Contacts 12
2 Guide to buying property in The British Virgin Islands
The British Virgin Islands
The Residential property
purchase procedure in
the British Virgin Islands
Buying property in the British Virgin Islands should be relatively straightforward,
but we would always recommend that you instruct the services of a reputable
agent, attorney and surveyor.
This document has been compiled as a guide for potential purchasers of
property in the British Virgin Islands. It does not seek to provide or replace legal
advice which you should obtain, nor is it intended to have any contractual effect.
Guide to buying property in The British Virgin Islands 3
The British Virgin Islands
The Non-Belongers Land
Holding License
For the most part, purchasing property in the British Virgin Islands follows a
pattern which is common to other English Common Law jurisdictions. The main
feature of the process that will be unfamiliar to most purchasers from overseas is
the Non-Belongers Land Holding License (NBLHL).
All overseas investors (including citizens of the United Kingdom) require a NBLHL
to purchase property in the British Virgin Islands. Agreements for the purchase of
property are therefore made contingent upon the purchaser securing this license.
A license entitles the purchaser to own a specific property and is non‑transferable.
4 Guide to buying property in The British Virgin Islands
The British Virgin Islands
Application for the NBLHL
Development Commitment
Application for a NBLHL is made to the
Ministry of Natural Resources of the
Government of the Virgin Islands and
must be supported by two character
references, a financial reference, and
a police certificate of good standing
plus other supporting documentation.
The purchase of a property by a
Non‑Belonger must be advertised
locally for four consecutive weeks in
local off line and on line media prior to
submission of the license application to
the Government.
Where a License application is made
to buy a parcel of undeveloped land,
the applicant will be required to make
a commitment to spend a specific sum
on development (normally not less than
US$250,000) within a specified period
(normally not more than three years).
The development commitment will vary
depending on the size of the property,
environmental and other planning
considerations. The sub-division of land
by Non-Belongers is not encouraged
except as a part of a comprehensive
development scheme.
The purchaser’s attorney will normally
assist the purchaser with the preparation
and submission of the license application
to the Government. There is a License
filing fee of US$200 for each person
named in the application and US$500
for companies. The fee for the grant of
the License is US$600 for each person
named in the License or US$1,000 for a
company plus US$600 for each director
and shareholder of a company.
Re-sale of Property subject to
a Development Commitment
Undeveloped land cannot be resold
until any development commitment
has been fulfilled. Penalties will apply
in cases where the property is sold
without fulfilling the development
commitment. The objective of the
licensing regulations is to prevent
speculation on undeveloped property.
Guide to buying property in The British Virgin Islands 5
The British Virgin Islands
6 Guide to buying property in The British Virgin Islands
The British Virgin Islands
Procedure for
Purchasing Property
The normal sequence for purchasing
property in the British Virgin Islands
is as follows:
1 Earnest Deposit
A prospective purchaser will usually pay
a 10% earnest deposit to the vendor’s
agent which will be held in escrow prior
to the signing of a purchase and sale
agreement. This ‘good faith’ deposit
confirms the intent to proceed with
a purchase but is made ‘subject to
contract’. Therefore it does not create
a legal obligation on either party and is
fully refundable until a purchase and sale
agreement is signed.
2 Purchase and Sale Agreement
Once agreement in principle has been
reached and a deposit has been paid the
vendor will normally engage their attorney
to prepare a legally binding purchase
and sale agreement to be signed by
the parties. Typically this will contain a
condition that completion of the purchase
is contingent upon the purchaser
obtaining a NBLHL.
3 Application for a NBLHL
4 Completion of the Sale
Completion will take place shortly
after the purchaser receives the NBLHL.
The vendor signs a Deed of Transfer and
this document is counter-signed by the
purchaser. Payment of the balance of
the purchase price is due at this stage.
5 Payment of Stamp Duty
Following completion of the sale and
prior to registering the title at Land
Registry, the purchaser must pay Stamp
Duty to the Inland Revenue Department.
For overseas purchasers, Stamp Duty
is levied at the rate of 12% of the price
or appraised value and is payable by
the purchaser.
6 Registration of Title
Following completion the purchaser’s
attorney will normally register the title
with the Registrar of Lands. The Land
Register provides definitive evidence
of title.
Neither purchaser nor vendor need
be present in the BVI at any stage of
the transaction.
Under the purchase and sale agreement
the purchaser will agree to submit
their License application to the BVI
Government within a specified number
of days following signing of the purchase
and sale agreement.
Guide to buying property in The British Virgin Islands 7
The British Virgin Islands
Building Your Property
and Living in the BVI
Financing a Purchase
The following banks in the BVI offer retail banking services to
overseas purchasers:
Banco Popular de Puerto Rico
www.popular.com
CIBC First Caribbean (formerly Barclays Bank plc.)
www.cibcfcib.com
First Bank
www.firstbankbvi.com
Scotiabank (BVI) Limited
www.scotiabank.com
VP Bank (BVI) Ltd
www.vpbank.vg
Mortgage finance will usually be available to overseas investors subject to status.
Construction finance may also be available for new construction. Mortgages are
granted for terms of up to twenty years. Interest rates are generally pegged to LIBOR
or New York Prime rate. Banks will consider financing for the purchase of land.
8 Guide to buying property in The British Virgin Islands
The British Virgin Islands
Building a House
Several first class architects and
contractors are based in the BVI
and good skilled labour is available.
Architects fees will vary according to their
level of involvement, responsibility and
the complexity of the work.
Most building materials are imported
through local merchants. Materials may
be imported directly and will be liable to
import duty levied at rates of 5%-20%.
From the planning stage, a house may
take 9-18 months to complete. There are
no restrictions against an owner building
a house using their own labour.
Planning and Building Control
Development in the BVI is governed by
Development Guidelines which determine
general policy. Development plans must
be approved by the Land Development
Control Authority, responsible for
compliance with Development Guidelines
and by the Building Authority who are
responsible for ensuring that building
conforms to the building code guidelines.
Property Taxes
An annual Property Tax is payable to the
Government comprising Land Tax, which
is levied at the rate of US$150 for the
first half an acre to one acre and US$50
for any additional acreage thereafter and
House Tax, levied at the rate of 1.5%
of the assessed annual rental value. In
practice, annual property taxes for an
average two or three bedroom house
will generally be less than US$1,000.
Utilities and Services
Electricity: A reliable 110V, 60 cycle
mains supply is available on Tortola,
Beef Island, Virgin Gorda, Jost Van Dyke,
Great Camanoe and Anegada
Water: Although mains water is
available in most parts of Tortola and
some areas of Virgin Gorda, Jost Van
Dyke and Anegada, most domestic
water requirements can be provided
by rainwater roof catchment stored in
cisterns, which are integrated into the
foundation design of each building. Fresh
drinking water can also be purchased
Sewerage: There is a main sewerage
system in Road Town. Elsewhere private
septic tanks are normal
Gas: Propane gas, supplied in cylinders,
is commonly used for cooking.
Arrangements can be made for
regular delivery
Telephone: Three companies provide
modern telephone, facsimile and internet
service throughout the Territory
Cable TV: BVI Cable TV provides service
to the majority of residential areas in
Tortola and Virgin Gorda
Internet: Current internet connection
speeds are up to is 8mbps
Postal Services: Postal delivery is
provided by a system of Post Office
boxes situated in Road Town, East End,
West End and on Virgin Gorda
Work Permits and Trade Licences
A Work Permit is required by any
expatriate wishing to engage in full time
or temporary employment in the BVI.
Permits will only be granted where it is
demonstrated that the position cannot be
filled from the local labour force.
A Trade Licence is required to operate
a business in the BVI. A work permit
will also be required in conjunction with
the Trade Licence if the owner of the
business also works in the business. Full
details of the work permit regulations can
be obtained from the Labour Department.
The Department of Trade and Consumer
Affairs can provide further information on
the Trade Licence requirements.
Immigration
Purchase of a property in the BVI does
not in itself establish resident status.
However an identification card is
available to a person who holds a NBLHL
which will allow the holder to be granted
leave to stay in the BVI for a period of up
to six months.
An annual certificate of residency,
entitling the holder to land or embark in
the Territory for an indefinite period, may
be granted to a person who intends to
reside permanently in the BVI.
Guide to buying property in The British Virgin Islands 9
The British Virgin Islands
At a glance
Buying
Transaction costs
Attorney fees
ww2% of the first US$50,000 and 1% of the remaining consideration,
but not less than US$150.00
Non-Belongers Land Holding License (NBLHL) for individuals
wwLicence filling fee of US$200.00
wwFee for the grant of the Licence is US$600.00 for each person named
in the Licence
Non-Belongers Land Holding License (NBLHL) for a company
wwLicence filling fee of US$500.00
wwFee for the grant of the Licence is US$1,000.00 plus US$600.00 for each director
and shareholder
Stamp Duty
ww12% of the price or appraised value is payable by the purchaser
Standard purchase procedures
wwDeposit: Purchaser pays a 10% deposit to the vendor’s agent (held in escrow)
wwPurchase and Sale Agreement: All parties sign a legally binding purchase and
sale agreement drawn up by the vendor’s attorney. The purchase is contingent
upon the purchaser obtaining a NBLHL
wwApplication for a NBLHL: Purchasers are contractually required to submit their
Licence Application within a specified period following signing of the purchase
and sale agreement
wwCompletion of the Sale and Transfer of Title: After receipt of a NBLHL the
purchaser settles the balance of the purchase price and pays Stamp Duty
to the Inland Revenue prior to the transfer document being registered
(Neither purchaser nor vendor need be present in the BVI at any stage of
the transaction)
Selling
Transaction costs
Attorney fees
ww2% of the first US$50,000 and 1% of the remaining consideration,
but not less than US$150.00
Agents’ fee
Taxes
wwNo Stamp Duty Tax
wwNo property transfer tax
(No capital gains, death duties, corporation or personal income tax.)
10 Guide to buying property in The British Virgin Islands
The British Virgin Islands
Owning
Annual costs
Property Insurance
Contents Insurance
Taxes
wwThere is no corporation and income tax, death duties or estate tax
Land Tax
wwUS$150.00 is charged for the first half an acre to one acre
wwUS$50.00 for any additional acreage thereafter
House Tax
ww1.5% of the assessed annual rental value
Hotel Tax
ww7% for those that have rentals with rental periods of less than six months
Import duty
wwUp to 6 months an individual (first arrival in the BVI staying for more than
6 months) is permitted to import up to US$1,000 worth of “used” possessions
and furnishings without incurring liability to import duty
wwAfter 6 months such items are subject to duty at rates between 5%-20%
wwImport duty on vehicles is 20%
Monthly costs
wwElectricity
wwWater
wwGas
wwTelephone
wwCable TV
wwPool and garden maintenance
Property Management
wwStarting from US$200 per month
Building
wwTypical building costs range from US$250 - US$350 per sq. ft. plus soft costs
and external improvements
wwSwimming pool may cost between US$60,000 - US$100,000
depending on size and design of pool
wwArchitects fees will vary
wwDesign and supervision between 10% - 12%
wwMaterials imported directly are liable to import duty levied at rates of 5%-20%
Rentals
wwLong term - Standard fee is one month’s rent with no fee after the first year
wwShort term - Broadly speaking 10%-25% commission is payable on
short term rentals
For those seeking to rent on a short term basis (less than six months), permission
to rent as well as a trade licence are required.
Guide to buying property in The British Virgin Islands 11
contacts
Edward de Mallet Morgan
International Residential
T +44 20 7861 1553
E [email protected]
Fran Thacker
International Residential
T +44 20 7861 1275
E [email protected]
@KFInternational
KnightFrank.com
Important Notice
1. No reliance on contents: This is only a guide to the buying process in British Virgin Islands. It is not definitive and is not intended to give advice. It must not be relied
upon in any way. So far as applicable laws allow, no responsibility or liability whatsoever will be accepted for any errors or for any loss or damage resulting from any
use of or reference to the contents. As a general overview prepared using information from British Virgin Islands. lawyers, this guide does not necessarily represent
the view of Knight Frank in any respect. 2. Independent advice: You must take specific independent advice from your professional advisers in all cases. In preparing
this guide, we do not imply or establish any advisory or professional relationship. We do not have any relevant authorisation from the Financial Services Authority to
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