Buying ·
The costs of acquiring property in Barbados
The full cost of a Barbados property purchase, who customarily pays the transfer tax and stamp duty, legal fees, and the annual costs of ownership.
Wharton Real Estate Group
The asking price is never the whole cost of an acquisition. In Barbados, purchasers benefit from a convention that places the larger government charges on the seller. This article sets out what to budget for, how costs are customarily allocated, and what ownership costs each year.
The arrangements described are drawn from published guidance and are not legal or tax advice. Request a written estimate from your attorney before you commit.
Costs at acquisition
Borne by the purchaser
The deposit. Not a cost, but the first payment you make: normally 10% of the price on signing the agreement for sale, with the balance due on completion (Knight Frank).
Legal fees. You will need your own Barbados attorney to examine the title, prepare or review the agreement for sale and complete the conveyance. Conveyancing fees in Barbados are set by a statutory scale. The Barbados Estate Agents and Valuers Association (BEAVA) publishes it as follows, in Barbados dollars:
| Portion of the price (BDS$) | Fee |
|---|---|
| First 25,000 | 1,000 |
| Next 75,000 | 2.5% |
| Next 100,000 | 1.5% |
| Next 300,000 | 1.25% |
| Thereafter | 1% |
VAT at 17.5% is payable on legal fees. Withers notes that the scale sets the minimum charge, so ask your attorney for a written estimate at the outset.
A share of the land tax. The year’s land tax is apportioned between seller and purchaser at completion, so the amount depends on the property’s value and the date of the transaction.
Financing costs. Where a mortgage is arranged: valuation, arrangement and the lender’s legal fees.
Exchange control registration. For non-residents, ordinarily handled by your attorney or bank. You remit the price in foreign currency, and it is registered with the Central Bank of Barbados so that it may be repatriated on a future sale. BEAVA notes that exchange control permission for the purchase itself is usually readily obtained once the funds are registered.
For a cash purchaser, legal fees and disbursements typically amount to a modest percentage of the price, considerably less than in jurisdictions where the purchaser bears the transfer tax.
Customarily borne by the seller
According to BEAVA and Withers, the seller ordinarily pays:
- Stamp duty at 1%.
- Property transfer tax at 2.5%. On bare land it applies to the whole price; where a house is included, an initial amount is exempt.
- The agent’s commission. BEAVA describes 5% of the price, plus VAT, as normal.
The seller’s own legal fees are additional. If you are both selling and buying, budget for each side.
An illustration
Consider a cash purchase of a condominium at US$400,000. On the scale above, the purchaser’s legal fee on BDS$800,000 comes to about BDS$11,125, plus VAT of roughly BDS$1,950: around US$6,500 in total. Add the apportioned land tax. The seller settles the stamp duty, transfer tax and agent’s commission from the proceeds of sale.
This illustration is indicative only; your attorney’s quotation is definitive.
The costs of ownership
Land tax
Land tax is the principal annual property tax. The Barbados Revenue Authority publishes the current residential bands, applied to a property’s improved value:
| Improved value (BDS$) | Rate |
|---|---|
| Up to 400,000 | 0% |
| 400,000 to 550,000 | 0.1% |
| 550,000 to 950,000 | 0.7% |
| Above 950,000 | 1.0% |
The rates are applied band by band, so each portion of the value is charged at the rate for its band. Consult the BRA’s page for the current figures before finalising your budget.
Other ongoing costs
- Insurance, including hurricane cover
- Maintenance, which is higher in a tropical, salt-air climate
- Utilities, often more than anticipated where air conditioning is in regular use
- Estate or condominium fees in gated communities and apartment buildings
- Management fees, where the property is cared for in your absence
Currency
Prices are quoted in US dollars, Barbados dollars or both. As the Barbados dollar is pegged at BDS$2 to US$1, that conversion is fixed. If your income is in Canadian dollars or sterling, your effective cost will move with that currency against the US dollar.
Questions to resolve before making an offer
- What will my attorney charge, confirmed in writing?
- Are there estate fees or a condominium budget I should review?
- What is the land tax liability on this property?
- What will insurance cost at this address?
- As a non-resident, how will exchange control registration be managed?
Our complimentary international buyer’s guide includes a checklist to review with your attorney.