Thursday, October 29, 2009

Belize Real Estate / Investing in Belize

The Belizean Government has implemented a series of laws and incentives that promotes foreign investment and ownership in Belize Property. Foreigners are able to own land and property in their own name with equal rights as Belizeans, yes you heard us right equal rights.

Belize is part of the British Commonwealth and the legal system is based on Old British Common Law. As an English speaking central american country, most investors from North America will not require translation of contracts because they are all in English. Please note when purchasing Belize real estate you will need the services of a qualified attorney as well as an experienced real estate professional.
Always perform your Legal Due Diligence to include a review of the property title at the Lands Department, confirmation of tax clearance and make sure the property is free of mortgages (encumbrances), debt or pending legal cases. Certain transactions require technical due diligence to include boundaries,topography, water availability, energy availability, analysis of permissions and permits, highest and best use studies, market studies.
Once all due diligence periods have been fully executed and the property is cleared for sale, the closing is scheduled. At closing a new property title is drawn, signed and funds are transferred.
In order to register the property a property valuation is carried out by the Belize Valuation Department and the transfer confirmed by the Justice of the Peace. Registration takes place at the Lands Registry at which time registration fees and stamp duty are paid.

Title to property in Belize can be held in three different ways; (1) Deed of Conveyance; (2) Transfer Certificate of Title and (3) Land Certificate.
A Deed of Conveyance originates from the British colonial days and is a registered instrument of ownership. A Deed of Conveyance is a valid legal title once an attorney has confirmed that the seller has good title to the property. This form of ownership can be converted to a Certificate of Title via an application for first registration. Any subsequent buyer is issued a Transfer Certificate of Title. A Land Certificate is an absolute title and applies in new or specially designated areas. Under the Registered land Act of 1987, the government is convertting all freehold land (held under Conveyance) to Land Certificate titles to achieve a uniform system as areas are being surveyed.

The costs assocIated with Belize real estate transfers include stamp duty, registration fee, legal fees, realtor commissions and annual property taxes.
■Stamp duty - 5% on the declared property value at the time of transfer.
■Registration (or recording) fee - US $7.00.
■Legal fees (title search, closing and registration) - Between 1.5 to 3% of purchase price (escrow fee of 0.5%).
■Realtors commission - Between 5-10% of purchase price
■Property taxes - Property taxes outside cities are based on land value rather than the developed value. Tax rates vary between 1% and 1.5% of the value of the undeveloped land.

The Doing business project by The World Bank Group calculated the official costs for registering a property in Belize in 2008 as 4.7% of purchase price, based on a business to business purchase. The project reports that the time taken to register a property in Belize is 66 days.

International Title Insurance is available for Belize real estate affording similar levels of protection as a standard policy in the United States. There are two main US companies offering title insurance in Belize: First American Title Insurance Company (NYSE-FAF) and Stuart Title (NYSE-STC).

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