Property and Land Investment Opportunities Buying property, a home or a business in the British Virgin Islands is not difficult but it does take time and committment. When purchasing property of any type it must be remembered that the BVI does not have a lot of land to begin with. Therefore is is at a premium and difficult to find. Belongers, those that are born in the BVI, always have the first choice of property selection. In order for a non-resident to purchase and own property in the BVI, whether it be raw land, a home, multiple dwellings or a business/commercial venture, one must follow the stated necessary procedures. It is first necessary to obtain a Non-Belongers Land Holding License. Agreements to purchase property are therefore made contingent upon such a license being granted by the Government to the purchaser. A license gives an entitlement to own a specific property and is non-transferable. Licences are issued by the Ministry of Natural Resources and Labour under the Non-Belonger Land Holding Regulation Act (Cap. 122). Forms can be obtained from the Ministry of Natural Resources & Labour 22 Administration Drive Central Administration Complex Road Town, Tortola British Virgin Islands Tel: (284) 468-3701 Ext. 2147 Fax: (284) 494-4283 Email: mnrl@bvigovernment.org The Non-Belongers Land Holding License Application for a Non-Belongers Land Holding License must be accompanied by: two character references, a financial reference, a police certificate of good standing plus other supporting documentation. The purchase of a property by a Non-Belonger is required to be advertised locally for four consecutive weeks in a local paper prior to submission of the Licence Application to Government. If the application for a License relates to undeveloped or partly developed land, the applicant will be required to make a commitment to the BVI Government to expend a specific sum on development within a specified period which will normally be three years. The development commitment required will normally be not less than $100,000 and can be proportionately more according to acreage. Environment and other planning considerations will determine the appropriate level of development. Sub-division of land is not encouraged except as a part of a comprehensive development scheme. Undeveloped land cannot be resold until such a development commitment has been fulfilled or a penalty paid on closing to the Government. Generally, the penalty will be 25% of the sale contract price. The purchase of developed property for residential purposes will generally not incur a development commitment. The objective of the licensing regulations is to prevent speculation on undeveloped property. Applications for all licenses are referred to the Executive Council for approval. There is a license filing fee of $50.00 for each person or company named in the application. The fee for the grant of the License is $150.00 for each person or company named in the License. An overseas investor is free to let a property on a long term or short term (holiday let) basis subject to approval to rent the property by the Executive Council as part of the Licence application and the granting of a trade licence. Such approval by the Executive Council will be stated on the Licence and will automatically grant approval of the relevant trade licence. Procedure for Purchasing Property Earnest Deposit: It is normal practice for a prospective purchaser to pay a 10% earnest deposit to the vendor's agent to be held in escrow prior to signing of a purchase and sale agreement. Although payment of a deposit does not bind the vendor or their agent legally it is taken as a clear indication that a purchaser intends to sign a purchase and sale agreement forthwith. Interest earned on this deposit goes to the purchaser in the event that the purchaser withdraws prior to signing contracts. If the purchase proceeds to contract, interest goes to the vendor and the deposit is non refundable. Purchase and Sale Agreement: Once agreement in principle has been reached between the purchaser and the vendor, a legally binding purchase and sale agreement drawn up by the vendor’s attorney is signed by the parties. This will normally contain a condition that completion of the purchase is contingent upon the purchaser obtaining a Non-Belongers Land Holding License. Application for a Non-Belongers Land Holding License: Generally, purchasers are contractually required to submit their Licence Application within a specified period following signing of the purchase and sale agreement. Completion of the Sale and Transfer of Title: This will normally take place shortly after receipt of a Non-Belongers Land Holding License. Payment of the balance of the purchase price is due at this stage. Neither purchaser or vendor need be present in the BVI at any stage of the transaction. You may prefer to use the services of a local professional. A comprehensive list of Law Firms on the island can be found on www.dpu.gov.vg in the Links Section. Tenure and Registration Section The majority of land in the BVI is owned in fee simple. A purchaser will normally acquire absolute title which is registered in the BVI Government Land Registry. Registered titles relate to a detailed cadastral survey which defines legal boundaries. No transfer of land can take place unless the boundaries of the property have been determined to the satisfaction of the Registrar of Lands. Property in the BVI may also be held on long lease from the Crown or private individuals. The leases term is normally 99 years or the unexpired term in the case of an assignment of a lease. For practical purposes a purchaser of such a leasehold interest will enjoy all the benefits of an absolute title for the duration of the lease. Real Estate Taxes On the transfer of title to a property Stamp Duty at the rate of 8% of the price or appraised value is payable by the transferee (purchaser). Land Tax at the rate of $50.00 is paid annually for a any acreage under a half of an acre. $150.00 is charged for the first half an acre to one acre and $50.00 for any additional acreage thereafter. House Tax is also levied annually at the rate of 1½% of the assessed annual rental value. Planning and Building Control Development in the BVI is controlled by Planning Guidelines which determine general policy. Development work must be approved by the Land Development Control Authority who are concerned with planning matters and by the Building Authority who are responsible for ensuring that building conforms with the building code guidelines. It is preferred if working drawings submitted to these Authorities are prepared by architects based in the BVI.