British Virgin Islands

The basics/background – The British Virgin Islands are comprised of over 50 separate islands or cays – with the 4 largest being Tortola, Virgin Gorda, Jost Van Dyke and Anegada. Located in the Leeward Islands just to the east of Puerto Rico and the US Virgin Islands, the BVI are small in total land area (about 59 square miles) and population (total of about 26,000 people), but large on sailing, scenery and island-hopping in search of a more perfect beach than the one visited yesterday. Strangely enough, the official currency of the BVI is actually the US Dollar. Most visitors start their stay on Tortola, the largest of the islands and government center. Arriving to the territory by air is almost certainly through Terrence B. Lettsome Airport (airport code EIS) on Beef Island (attached to Tortola's east end) – most likely on American Eagle. There are also smaller airports on Virgin Gorda and Anegada and numerous ferry options for entry from adjoining St John and St Thomas in the USVI. There are no direct flights from the US or Europe at this time. Numerous charter air operations operate around the BVI and region.  Many transfer from St John or St Thomas in the US Virgin Islands via ferry, yacht or under sail.

Desirability for investment - Much like other Caribbean destinations, the BVI’s appeal to prospective real estate investors can be largely tied to the same appeal it holds to tourists, namely: weather, scenery and Caribbean Sea activities. The British Virgin Islands also offer a great variety of hidden beaches, bays and coves – many of which you can have to yourself if you make anchor off of them. The Baths on Virgin Gorda, the funky vibe of Jost Van Dyke and the unusual coral atoll of Anegada are also unique features of the BVI. It is also hard not to note the fact that the BVI is one of the largest locales in the world for the formation of offshore companies with some 65,000 formed in a single recent year. It is also the fourth largest source of captive insurance registrations.

The tax and land use landscape of the British Virgin Islands - There are no restrictions on private ownership of land in the BVI. For non-residents or citizens, a "non-belonger’s license" is required. If the land is unimproved when purchased, there will generally be a two to three year time commitment to develop and a minimum expectation/commitment of about $250,000 in construction. There are application and license fees which will be about $200 per person or $500 for a company [people often use companies to hold title in order to avoid future payment of stamp duties – i.e., they convey ownership of the company rather than sell the property, thus not triggering the duty.] The issuance will cost $600 for an individual and $1,000 for a company. Allow anywhere from three to nine months for completion of the process for issuance. Land taxes are inexpensive at $50/year for a half acre or less, $150/year on the first half to whole acre and $50/year on all further acres or parts thereof. House taxes are 1.5% of assessed value. Some idiosyncracies to the BVI: before you can purchase your property, it must be advertised for 4 weeks to allow the locals a chance of first refusal under the same terms.

Stamp duties/transfer fees are a steep 12% of contract value (or appraised value if the BVI government appraises the value higher) - keep this in mind when choosing between a lot to build on or an existing home. The 12% would apply only to the land in the former case, to the improved property in the latter: potentially, a huge cost savings.

Custom duties are also considerable at 5-20% for goods brought permanently into the islands, e.g., imported vehicles will be taxed at 20%.

Building costs are anywhere from $150 to $350 per square foot, most commonly closer to the upper-end of that range. Several architects, developers, builders and designers are resident in the BVI.

Rental - Rental of properties is difficult to generalize… Caribbean rules apply. There is a high season of about four months (December through April, usually starting around Christmas) and a big drop-off to the off-season. Costs and rates tend to be about average for the Caribbean. A well-appointed villa may be $2,000 or more per week, but rentals of yachts/sailors are often more common. Management or caretaker services, housekeeping, carrying costs, etc. are also about average. Expect 30% plus or minus from a management company.

Ownership and Title Information - Ownership is freehold and subject to few restrictions. The process will generally be an offer coupled with funds equal to around 1% of the purchase price. If accepted, further down payment to 10% will be expected. The balance of the purchase price will be paid and the title transferred upon satisfactory title review.

Attorney fees for the transaction will be $300 for the non-belongers application and 1-2% for conveyance.

Application can be made for permanent residence in the islands if the BVI is to be a full-time home.

Any prospective investors should consider forming an off-shore company to hold title to land in the BVI. The BVI, itself, is a very popular place for the formation of off-shore companies. 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.

Representative listings:

Like most of the Caribbean basin, the BVI is without a MLS system to help in your search for properties. Fortunately, many agencies have offices here – the largest being Caribbean Realty, Coldwell Banker, Island Real Estate, Smiths Gore and Trude Real Estate. Like most of the Caribbean, it is often best to simply pick an area you like and start asking around with the locals, cab drivers, etc. as they always have more information than any single realtor ever could.

Prices vary widely by area, samples below are representative of a wide cross-section (all prices below in US Dollars).

Tortola: land lots from $85,000 and condos and villas from $500,000.

Virgin Gorda: land lots from $200,000 and villas from $650,000.

Anegada: 2.5 acres for $175,000, a villa from $1.1 million and new Anegada Beach Club in early development stages.

Jost Van Dyke: 3.75 acre land for $525,000

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