Buying property in Jamaica (from Overseas)
Jamaica is a name that is synonymous with not only track and field excellence but also an aesthetic beauty that is unlike any other. Jamaica is a unique destination that has a vibrant property market that has experienced and is experiencing magnificent growth. With the reduction in transfer tax and stamp duty costs, the market is ripe for those looking to invest or to simply acquire their own slice of the Pearl of the Caribbean.
If you are a Jamaican living overseas or you are an international resident and you are considering purchasing land in Jamaica, then this article is for you. Below are the relevant considerations for persons overseas who wish to buy land in Jamaica.
1. Locating the property
Once you have decided to purchase from overseas it is essential that you enlist the services of a reputable professional that you can depend on such as a licensed Real Estate Dealer. They can assist you in identifying a suitable location and narrowing it down to a property that meets your wants and needs and most importantly, your budget. They can also assist in carrying out the necessary due diligence before entering into the Agreement for Sale such as identifying whether the property is registered under the Registration of Titles Act, What is the size of the land? Who is the owner of the property? Is the land environmentally sensitive? This can also be facilitated through an Attorney-at-Law.
2. Obtaining a TRN
If you wish to do business with any government entity in Jamaica then you must have a tax registration number (TRN). This is obtained by an application to the Tax Administration of Jamaica and must be obtained before any entity or person can own any land in Jamaica. This can be facilitated by an Attorney-at-Law.
3. Engage the services of an Attorney
Jamaican law does not require that you engage the services of an Attorney however, doing so can be to your detriment. We recommend that an Attorney-at-Law be retained by every person seeking to purchase property from overseas.
The cost to do a real estate purchase in Jamaica is about 5.5% of the purchase price of the property. This generally includes the Stamp duty ($2,500), Attorney’s fees (up to 3% plus G.C.T.), the Registration fee payable to Title’s Office (0.25%) and the costs of the Agreement for Sale. There may be instances where a valuation report and surveyor’s report must be done and those attract a different cost.
5. Make an Offer
Once you have identified the property that you want to purchase then it is time to make your intention known by submitting an offer, usually via your real estate agent or Attorney-at-Law, to the owner of the property. The offer generally sets out the offer price, how the purchase will be financed (cash or mortgage) and how long the transaction is expected to last.
6. Agreement for Sale and payment of deposit
Once an offer is accepted then all the relevant information and terms and conditions are to be encapsulated in an Agreement for Sale. Your Attorney-at-Law will negotiate on your behalf by including your terms into the agreement and ensuring that your best interests are covered. The Agreement for Sale will indicate the important dates by which money is to be paid or when particular tasks are to be completed and all penalties for failing to do so will be outlined. It is the usual practice for buyers to pay the deposit and the ½ cost for preparing the Agreement for Sale when they first sign the document.
7. Payment of closing costs and Completion
After the Agreement for Sale is finalized then it will state how the remaining (closing) costs are to be paid and by when. This is facilitated by your Attorney-at-Law. These costs include the duties and government taxes, registration fee, Attorney’s fees and any other costs incurred. At the end of the purchase, your Attorney-at-Law will provide you with the relevant statements of accounts showing how your monies were applied and all other documents signifying your ownership of your new property.
Typical real estate transactions in Jamaica can take from 60-120 days to close where the vendor is using a mortgage to finance the purchase or 45-60 days where the purchase is a cash transaction.
At all times, it is recommended to pursue the process above with the guidance of experienced and reputable professionals. By doing so, your experience will be both rewarding and pleasurable