The Cost of Purchasing a Property in the Cayman Islands

The absence of property tax, income tax, inheritance tax and capital gains tax in the Cayman Islands, along with the fact that there are no restrictions on foreign ownership of a single property, makes investing in real estate in the Cayman Islands an attractive option for many.

As any good realtor will tell you, before you start looking at properties to buy, it’s vital to work out your budget. The purchase price is only part of the picture: as with anywhere in the world, when you purchase a property in the Cayman Islands, there are certain additional costs to consider up front.

As a rule of thumb, budget for 10 to 12% above the purchase price to cover the additional taxes, mortgage and legal fees involved in buying property in the Cayman Islands.

The following is a breakdown of exactly what those costs are.

Stamp Duty

The single largest cost involved in buying a property, above the purchase price, is stamp duty. This is a one-time fee payable to the Cayman Islands Government and is currently set at 7.5% of the purchase price or the current market value – whichever is higher. 

If you require a mortgage there will also be stamp duty to be paid on the loan. This is charged at a rate of 1% on loans below CI$300,000 and 1.5% on loans above CI$300,000.

Mortgage Costs

If you are applying for a mortgage as a resident most banks will require you to have been on the islands for at least six months. Mortgages for non-residents are also granted by local banks, but usually require a larger deposit – around 30%.

When a mortgage is approved, your lending bank will charge a ‘commitment fee’ of 1% on the loan amount.

Most banks will additionally require you to take out life insurance as a condition of granting a mortgage. For this you will need a medical examination the cost of which starts at around CI$150.

Legal Fees

It is advisable to appoint an attorney who will act on your behalf and confirm that the property is free of any liens or charges. Your attorney will also prepare the necessary documentation for you and may represent you at the closing if you are off-island.

If you are purchasing a property with bank financing, your mortgage lender will appoint an attorney for you. 

Expect to pay between 0.25% and 1% of the purchase price in legal fees.

Valuation

If you’re buying your Cayman Islands property with bank financing, the bank will require you to have the property valued by an approved chartered surveyor. Valuation costs vary according to the size and value of the property, but start from CI$500.

Inspection Survey

It is advisable to have an inspection carried out on any property you intend to purchase. This is to examine the structure, internal and external components, and the mechanical, engineering and plumbing systems, in order to identify any potential issues before you commit.

Inspections are charged at between CI$500 and CI$1500 depending on the size of the property.

The process of buying property in the Cayman Islands is relatively straightforward, and once an offer is accepted the time to completion can be as little as two to four weeks. However, if you are applying for a mortgage, note that the approval process may take up to six weeks.

It is also worth bearing in mind that although 10% to 12% is a reasonable budget for costs associated with purchasing a property, there will be ongoing costs such as insurance, maintenance, running costs and strata fees which should be factored in when calculating your budget. Your realtor will be able to provide you with estimated ongoing costs of a property you are interested in.

Ready to get started? You can view current properties for sale here.