The Cayman Islands are still a popular travel destination due to their luxurious nature, whose sights are enough to feed your soul. No wonder it became an ideal location for real estate investors from throughout the world. Other than their stunning scenery and elegant but relaxed island way of life, the Cayman Islands are well-known for their enticing government benefits, which include residency through investment schemes and exemptions from property taxes.
Furthermore, buying property in the Cayman Islands is a tempting option due to the nation’s Caribbean attractiveness as well as the reputable, clear-cut procedures used in the purchasing process.
However, it’s always better to know more so you can determine what to expect and what you should do to make your dream of owning a property in the Cayman Islands more feasible.
If you want to invest as an expat or high-net-worth individual, which is what i specialize in, you can email me (advice@adamfayed.com) or use WhatsApp (+44-7393-450-837).
What’s the residency status in the Cayman Islands?
Grand Cayman, the largest of the three islands, is 22 miles long and offers an enviable lifestyle with an exceptional selection of fine dining establishments, world-class cultural and sporting events, a vibrant fine and performing arts scene, and renowned beach and marine experiences. All of these things are easily accessible from Grand Cayman.
Travelers who are sick of the world and those looking for a peaceful break from a busy lifestyle will find it in the sister islands of Cayman Brac and Little Cayman, as it provides a relaxed, tranquil Caribbean island kind of experience.
International property purchasers who acquire real estate in the Cayman Islands valued at 1 million Cayman Islands dollars, of which at least $500,000 must be developed real estate in Grand Cayman, are eligible for residence, regardless of whether they intend to live there permanently or just as a holiday.
Buying Property in the Cayman Islands 101
Purchasing real estate in the Cayman Islands can be a wise lifestyle choice. This can be added to your financial undertaking while seeking a better place to invest.
This British Overseas Territory offers excellent outdoor recreation opportunities. However, the Cayman Islands have always been known for having a very high standard of living due to their excellence in public services.
It extremely complements its rich cultural heritage and, of course, first-rate healthcare. It became a second home or somewhere for many foreign retirees who chased the chance to try a new place that has an abundance of good services and vistas to offer.
What You Should Know Before Purchasing Real Estate
The Cayman Islands’ contemporary infrastructure facilitates comfortable living and quick travel. There are ten private schools, three hospitals, a well-equipped grocery store, an International Baccalaureate School, a well-developed road network, and a range of professional and retail services. With today’s accessible and advanced communication facilities, doing business and establishing contact abroad is a simple task.
The Islands’ Land Registry is an up-to-date system that gives buyers peace of mind and streamlines the transaction. Since land ownership is recorded with the Cayman Islands Government, title insurance is often not required.
The Cayman Islands Government created the term “Caymankind” to refer to the experience of Caymanian culture and the likelihood that newcomers will be greeted with hospitality and warmth by both locals and visitors from other countries. This demonstrates how dedicated the Cayman Islands are to treating others, solidifying how they are, most notably, ranked by Forbes Magazine as one of the world’s nicest nations.
Other than that, crime rates are among the lowest in the Caribbean. It’s due to the fact that the Royal Cayman Islands Police Service has a well-equipped police force.
Taxes in the Cayman Islands
There are no corporation taxes, income taxes, capital gains taxes, inheritance taxes, or recurrent property taxes in the Cayman Islands, which draws lots of foreigners into wanting to establish a property right away.
Real estate transactions are subject to a one-time stamp duty. This was also known as a land transfer charge. And currently, it’s at 7.5% of the purchase price or the property’s original value.
Purchased land that’s been sold for less than 180,000 USD or is valued at less than 481, 000 USD is exempt from paying this tax. These purchases made over this threshold qualify for a discounted rate of 2%. Another thing that you should be informed of is that this cost is made payable by the Cayman Islands Government.
Legal Framework and Financing
It is recommended that buyers hire a lawyer to draft the legal paperwork required for closing, as this will likely cost them between 0.5% and 1% of the purchase price.
Although they are there, real estate agent costs are exclusively covered by the seller, which provides further financial relief for purchasers. Sellers should anticipate receiving commission payments based on a standard schedule established by CIREBA.
For instance, homes valued between 95,000 USD and 495,000 USD will follow the 7% rule. Moreover, properties valued between 995,000 USD and 9,995,000 USD will follow the 5% rule.
A valuation assessment is necessary if you decide to finance with a Cayman Islands bank and pursue a mortgage. The cost of this report varies based on the size and value of the property, but it typically starts at 480 USD. After submitting an application, the mortgage approval procedure typically takes four to six weeks.
When choosing a Cayman house that best meets their needs, purchasers may feel at ease with professional care and advice. It’s all due to the wealth of legal and financial specialists on the island.
Overview of Real Estate Law
Cayman’s real estate market is clear-cut and easy to understand. Title is issued and guaranteed by the Cayman Islands Government, and there are no yearly property taxes or limitations on foreign ownership by individuals—aside from a one-time stamp charge.
Cayman’s real estate market in the past (before 1980) was best compared to the Wild West. Everything was man for himself; there were no real estate regulations, no protections, and no uniformity in corporate operations. The Cayman Islands Real Estate Brokers Association (CIREBA) was established in 1987 when a number of the area’s real estate brokers decided to collaborate.
Land ownership in Cayman is a wise and hassle-free investment since there are no property taxes. When the time comes, you may construct when you’re ready or sell the land for a profit.
Given the robust real estate market and the scarcity of available inventory, it is unsurprising that developers are seizing the chance to restock the market in the Cayman Islands.
Cost of buying property in the Cayman Islands
Single-Family Residences
Although there are only a few hundred single-family house property transactions in Cayman each year, 74 had been sold by the end of June 2023 for an average value of 188,000 USD, or 96% of the asking price.
Once again, there was a rising trend in the sales price of real estate, and Little Cayman and Cayman Brac have had a share of this growth. Grand Cayman has 176 single-family houses listed for sale as of July 1st, 2023. This has an average listing price of 4.7 million USD.
There were 21 strata-titled properties listed at an average price of 198,000 USD. There are also 43 semi-detached properties listed at an average price of 1.5 million USD. In Savannah, the average selling price in 2023 was 400 USD per square unit for residences that were landlocked.
It cost 560 USD per square foot for properties that were canal-front. However, it ranged around 360 USD per square foot for homes that were particularly still under construction.
In West Bay, residences ranged in price from 170 USD to 400 USD per square foot. However, condominiums were sold for an average of 700 USD per square foot. Furthermore, there have been recent and fewer sales in West Bay as a result of the very high number of new projects developed in 2022. This is where many of them were sold at competitive pre-construction prices.
Apartments and Condominiums
There were 916 condominiums offered for sale on CIREBA at the beginning of July 2023, and 157 of those condos had already sold for an average of 96% of the asking price. It is common knowledge that there are two primary segments of the Cayman Islands condominium market: those on Seven Mile Beach, which are typically purchased by foreign nationals as daily rental investments, and those that are typically inland apartments and townhouses.
The stock of brand-new condominiums is constantly expanding. Additionally, older residences with excellent beach frontage have benefited the most from the steady appreciation observed on SMB.
These have been excellent candidates for reconstruction, especially after Seven Mile Beach’s Planning Department decided to permit structures up to ten stories. One example is the Lacovia apartments, which were selling for 1.2 million USD in 2019 but saw a price increase to 3.6 million USD when the strata members authorized the reconstruction.
The lowest price that was paid when prices were under contract in 2022 and 2023 was 5.5 million USD, while the highest price (for the penthouse) was 30 million USD. The view, floor level, and space footage all affect the price of SMB.
Prices for two- to three-bedroom apartments in inland apartment buildings have also been steadily rising. Typically, these apartments are bought for long-term rental revenue or owner occupancy. George Town’s Retreats, with their signature offers of garden, coco, and sunset, provide useful insight into the increase in pricing between 2022 and 2023.
The average price of a two-bedroom apartment sold in 2022, out of the three property transactions, was 7,600 USD. In July 2023, there was just one apartment up for sale, asking 9,000 USD, which would have represented a 19.3% rise above 2022 pricing if the property had sold for that amount.
Warehouses
The need for storage spaces has increased dramatically due to the expansion of the population and enterprises, and many land parcels have been sold with the express intent of constructing warehouses. The demand for warehouses is so great that a plot of land was sold in a few hours for full payment in early 2023.
On July 20, 2023, 19 warehouse units with an average asking price of 8 USD per square foot were advertised on a block of land with approved designs that had sold for 0.90 USD per USD.
On the other hand, the inclusion of an automated door, air conditioning, the usage of space above head height, a restroom, security, elevation, and whether the warehouse is situated in a flood-prone location all affect how much a warehouse costs.
In July 2023, the average price of multi-storage warehouse complexes for sale was 40,000 USD. Central George Town, particularly the region close to the airport, and the vicinity of Seven Mile Beach’s center are popular locations for warehouses.
Best places to buy property in the Cayman Islands
The most sought-after locations for property acquisition in the Cayman Islands cover:
- Seven Mile Beach: Renowned for its breathtaking natural scenery and high-end luxury waterfront properties, Seven Mile Beach stands as the premier and most coveted area in the Cayman Islands.
- West Bay: Characterized by a predominantly residential setting and an authentic Caribbean atmosphere, West Bay provides a more cost-effective alternative to Seven Mile Beach while fostering a strong sense of community.
- George Town/South Sound: Boasting a diverse real estate landscape, this area presents a wide range of properties, from opulent condominiums to town homes within gated communities. Recognized for its robust demand, it offers a sound investment opportunity in Grand Cayman.
- Grand Harbour: Emerged as one of the rapidly growing communities in Grand Cayman, Grand Harbour features family-friendly neighborhoods and a variety of housing options, including canal-front homes with private docks.
Getting Around Cayman’s Striking Property Market
However, selecting the ideal home is just one step in the purchasing process. A competent real estate agent may also provide insightful counsel on money and legal issues. They can assist you in comprehending the rules and legislation in your area and making sure your purchase complies with them. They may provide you with information on the local real estate market and assist you in making defensible choices about the potential and worth of various properties.
They may also provide guidance on recurring expenses related to property ownership in the Cayman Islands, including utilities, insurance, maintenance, and HOA dues, if any.
Selecting A Real Estate Agent
Choose a real estate agent in the Cayman Islands who has a track record of success in the area. Also, the ideal person is one who has thorough knowledge of the purchasing procedure and knows the depths of the local rules and regulations. Another is that, along with having outstanding communication skills, a professional realtor should be able to keep you informed and updated at every stage of the purchasing process.
Purchasing real estate in the Cayman Islands may be greatly impacted by collaborating with a trustworthy real estate agent. They can assist you in locating the ideal home, provide guidance throughout the whole purchasing process, and guarantee that you are making a wise purchase. They may also provide continuing assistance and guidance, as well as insightful analysis of the regional market.
Final Thoughts
It is essential to collaborate with a reputable and knowledgeable company that can provide knowledgeable advice. The same company should also offer you limitless assistance if you are wanting to invest in real estate in the Cayman Islands.
Overall, you can never go wrong with choosing the Cayman Islands to establish and buy your dream property here. It’s a great alternative because of the Cayman Islands’ tax-free atmosphere, variety of financial opportunities, and possibility of living on a beautiful island paradise. Purchasing real estate in the Cayman Islands is likely to be a rewarding experience. It’s a great location because of its immaculate beaches, opulent facilities, and welcoming locals.
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Adam is an internationally recognised author on financial matters, with over 760.2 million answer views on Quora.com, a widely sold book on Amazon, and a contributor on Forbes.
