Antigua and Barbuda
The basics – The islands of Antigua (pronounced An-teeg-uh by people in the Caribbean, not An-teeg-wuh as most others do) and Barbuda (Bar-buddha) are a British Crown territory, located in the center of the Caribbean and near the top of the Lesser Antilles. The Capital is St. John’s (also the cruise ship port) and the currency is the Eastern Caribbean Dollar (pegged to the US Dollar at $2.70 EC to $1 US). The total land area - for both Antigua and Barbuda - is 108 square miles and the population is estimated at 65,000 (63,500 on Antigua alone). Antigua is far more developed than Barbuda and plays host to the vast majority of visitors and investors to these islands (and we will consequently focus here). English is the official language, though island “Creole” or Patois is the norm.
Antigua is known for having 365 beaches (“one for every day of the year” - we haven't counted, but we're willing to take their words for it) and Barbuda for having secluded, pink sand beaches. As you might expect, typical Caribbean activities – such as snorkeling, sport fishing, scuba diving, nature hikes, Carnival festivals and the like – are first rate. Additionally, Antigua houses a modern cricket facility as part of their hosting world cup cricket practice several years ago and hosts both an international yachting (Classic Yacht Regatta) and sailing event (Antigua Sailing Week). Infrastructure is a little better than Caribbean-average. The roads and signage are fairly good, though not great. Access to most tourism destinations is something of a challenge, as everything from accommodations to attractions requires a bit of a trek by car. As usual, most of the destinations are on the periphery of the island and necessitate a pretty good sense of direction and even better map-reading skills to go from one place to the next.
Topography is rolling hills with a few “mountains” in the southwestern part of Antigua. Barbuda is even flatter. Weather is predictable – highs from 80 to the mid-90s (27-34 degrees Celsius) throughout the year. September can be hot when the trade winds don’t blow as much and September to November is the official rainy season (usually short duration showers).
Accessibility/Getting there – The primary airport is VC Bird, International (Sir Vere Cornwall Bird, Sr. – in case you were wondering), which is about average by Caribbean standards. Notably, Liat/Caribbean Airlines uses Antigua as its hub, offering direct or connecting flights to virtually all parts of the Eastern Caribbean and also Guyana in South America. International flights from North America and Europe also come directly into VC (airport code ANU). Antigua is a fairly frequent cruise ship destination, though not nearly to the extent of a St Thomas or even a St Maarten. Once on the island, rental cars are recommended as getting around the island any other way is problematic (unless you simply go to your resort and never leave). Be prepared for rental car counters without computers! A temporary driver’s license (valid for 90 days) is required ($20 US or $50 EC, last we checked) and can be obtained at the rental car counters. Remember to drive on the LEFT side of the road – British style.
Many arrive under sail or motor by boat, often into the famous Nelson’s Dockyard in English Harbour or Falmouth Harbour to the south or Jolly Harbour on the west side of Antigua.
Desirability for investment – Aside from the usual Caribbean beauty and activities, Antigua has a bounty of beaches, good ease of access and steady demand by tourists. Infrastructure - including electricity (primarily US 110 volt, 60 cycle), telephone, architects, developers, builders and such - are above average for the Antilles and Caribbean in general. Water and electricity are government-provided, though expensive by US standards (expect 30-60% higher).
Several new developments have appeared over the last few years, primarily from the northwestern area of Antigua (the Runaway Bay area) south to Jolly Harbour. By way of example, La Perla International Living has purchased the Jolly Harbour development, comprising 500 acres of coastline, marina and overlooking hillside. They are offering condos, villas, condo-hotel units and plots for sale. They are also doing a development on the east side of the island in an area called Nonsuch Bay. Apartments (condos), townhouses, villas and plots (upward of 1/3 of an acre in size) are again available.
The tax and land use landscape of Antigua:
Closing costs can be estimated at 10% in total, plus realtor’s commissions of 5-7% if applicable. There are generally no restrictions as to ownership and properties can be registered to business entities. Non-residents have to obtain an alien landholder’s license (which can take 4 months to issue) to buy property – at 5% of the value of the property. Occasionally, larger developers negotiate away this fee for first-time buyers from the government. In Jolly Harbour, for example, initial sales initially had this fee waived (not resales) – please check with the developer if you are interested, to be sure. Government transfer fees are 2.5% to the buyer and 7.5% to the seller. Lawyer’s fees of 1-2% round-out the fees to close and are typically paid by the buyer. Re-verify all of the above figures with your realtor, developer and the government to be sure. All of these numbers seem to be under constant evaluation and re-evaluation by the government particularly in light of the real estate slow-down.
Title to property is guaranteed by the government and registered therefore no title insurance is required. There are penalties and mandatory development timetables (i.e., if you buy raw land, you may HAVE to begin development within 6 or 18 months or be subject to penalties) for foreign investors in Antigua and Barbuda. The terms of your non-resident license will dictate whether any of these restrictions apply and what they will be.
There are property taxes, which are assessed based on the rental rate of the property. These appear cheap but are very difficult to estimate, but factor-in 1% in your homework. This appears to be changing to a more typical ad valorem system, but expect this to take considerable time to accomplish - as everything in the Caribbean does.
Rental taxes are 25% on net rental income for non-residents and there is a 5% capital gains tax on profits from sale of real estate.
Any prospective investors should consider forming an off-shore company to hold title to land in Antigua. Many hold title in a company name as it may obviate future payment of transfer taxes upon sale - i.e., you sell the company and not the land itself, which remains in the company name and therefore no transfer tax is triggered. It may also be possible to shelter rental income from taxation if the income inures to the company rather than an individual land-holder. With all of these matters, it is best to consult a local attorney, as they will aid in the formation of these companies and verify the best strategies for risk, tax and fee avoidance.
Rental
There are few significant condominium developments in Antigua and none that we are aware of on Barbuda. The Jolly Harbor area is the primary driver of new rental opportunities - though longer term rentals of homes is commonplace. It is difficult to make any generalizations about rental climate. Few statistics are kept so the consistency of rental rates and occupancy numbers are pure conjecture. One can assume typical management fees of 30-50%, high season from December to April and the other standard Caribbean rental conditions. Stated rates are usually 10% for management (which includes nothing but giving out keys and calling the maids for you), rental commissions of 8 1/3% and various other fees. Full-service management, including marketing, collection of monies and the like would garner closer to 30-40% in fees overall. Again, rental taxes are 25% on net rental income for non-residents.
Differences from one area to another - "Neighborhoods"
Realtors/MLS: There is no MLS system on the island and the usual “hit-or-miss” tactic of trying to find as many realtors as possible is your best bet for finding opportunities. Like most islands/countries without MLS, it is sometimes easiest to plan a 4-5 day stay in the islands and talk to as many people as possible – realtors included, of course. Often there are parcels, homes, etc. people are willing to or interested in selling, but you would never know unless you speak to the person directly or someone who is aware of their desire. Strangely enough, cab drivers seem to be among the most knowledgeable people around!
The VAST majority of development (and projected development) on Antigua is focused on the northwest, southwest and southern shores of the island. Runaway Bay in the northwest and Jolly Harbour seem to be the busiest - if you are looking for condos/apartments, these areas are for you. Additional smaller projects on the easternmost parts of the island seem to be picking-up steam. We feel that the eastern and northeastern sides of the island, as well as Barbuda, are best bets for getting "ahead of the curve."
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