Frequently
Asked Questions
Question: Can a foreigner own property outright in Belize?
Answer: Absolutely! Belize is part of the British Commonwealth and
the legal system is based on British common law. A foreigner has the
same rights as a Belizean citizen to freehold property ownership.
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Question:
Are any special permits required for a foreigner to purchase property?
Answer: No. Many Belize real estate websites make reference to an
'Alien Land Holding License' and development requirements. This is
confusing. The fact is that the Alien Landholding Act was abolished
in the early part of 2001. There are no more licenses, permits, special
permissions or conditions needed for a foreigner to take title to
freehold land in Belize.
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Question:
How are Ambergris Caye properties titled?
Answer: Presently, You can take title to freehold property on Ambergris
Caye in one of 3 ways. The oldest form of title is taken via a Deed
of Conveyance (or Deed of Encumbrance), which originates from the
British colonial days. Presently all lands north of the 'River' of
San Pedro Town are titled via Conveyance. Ownership by Conveyance
can be subsequently converted to a Transfer Certificate of Title (TCT)
via an application for first registration. A TCT is a physical title,
whereas ownership via Conveyance is a registered right to ownership
of a particular parcel of land. Either form of ownership is equally
secure and mortgageable, however it is slightly more costly to transfer
title on a TCT than on a Deed of Conveyance.
In 1987, the Government passed the Registered Land Act and certain
areas of Belize were subsequently declared compulsory registration
areas, which included nearly all of Ambergris Caye from the 'River'
to the south tip of the island. Under this act, the conveyed properties
were reissued new physical Land Certificate Titles with parcel number
designations that replaced the old Meets and Bounds references on
the original conveyed properties. The Government is in the process
of reregistering all freehold lands under the Registered Land Act
so as to eventually have a uniform nationwide system of land ownership.
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Question:
How do I ensure the property that I want to buy has clear title?
Answer: By having your legal representative research the title and
issue a title opinion. The title is researched in the Lands Registry,
and in the Companies Registry if the land is held under a company.
Liens, judgments and encumbrances are valid only if properly lodged.
A title opinion for land which is not in the new registration section,
such as conveyed land, takes a little longer as an abstract of title
must first be prepared that goes back no less than 30 years. The statute
of limitations on land claims is 30 years. An opinion of 'good and
clear title' will be issued once the attorney has satisfactorily examined
the abstract in fine detail.
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Question:
What about titles to 'condominiums'?
Answer: It should be noted that true condominiums only exist in the
New Registration zones where the Strata Act is applicable. That we
know of, San Pedro Town, Seine Bight and Belize City are the only
locations that have true condos with Strata Titles. Strata Title enables
one to pass physical title to a 'slice of air with a building in it'
without owning the land that is below it. ie: one can purchase and
take title to a 3rd floor unit without owning the shadow footprint
of the land below. Many developers around the country erroneously
refer to their projects as 'condos' when they are not located in a
new registration zone. If the 'condos' are not in the new registration
zone then they should be referred to as 'units' or 'residences' and,
in most cases, they will be titled via corporate share certificate(s).
This ownership structure is popular and is known to North Americans
as "Co-op's. The advantages of Co-operative Corporate ownership
are minimal closing costs and a higher degree of isolation from personal
liability. The downside is that share certificates cannot be mortgaged
by a lending institution. In most cases, purchasers feel equally comfortable
with both forms of ownership and there are many popular Co-op's that
exist within the Strata zones.
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Question:
Can I take title to my property under an entity other than myself?
Answer: Yes. This is one area where purchasers are generally lacking
in their due diligence. In many cases, it is prudent to form a Belizean
company and take title to the property under this structure. The cost
to form a company runs around $US 1000 and around $US 150 annually
to maintain it in good standing. One should always think re-sale when
investing in property. If you purchase a Belizean company that holds
the property then you will be subject to only a 3% tax on the value
of the purchase price. If you purchase a property, which is titled
in the seller's name, then you will be subject to a 5% transfer tax
on the purchase price. On sales under corporate ownership the savings
on the closing costs for the purchaser is always a 'deal sweetener'.
One can also take title under a foreign LLC however we have never
run into a situation where a foreign LLC was purchased along with
the property. It might behoove some foreign purchasers to take title
under a domestic LLC but we have yet to figure out any logical reason
to do this, other than to afford the owner some degree of domestic
liability shielding. A foreign LLC, just like a Belizean company,
must have a Belizean registered office (an attorney or CPA) and be
kept in good standing locally via annual filings.
One can also take title to property via an offshore vehicle, be it
a foreign trust or International Business Corporation (IBC). An IBC
is the most popular and is simply an anonymous company that is housed
in one of many offshore jurisdictions around the world. The ownership
of the IBC is via bearer shares so there is no record in any registry
of the actual shareholders of the company. The bearer shares can be
issued in ones' names or in the name of the attorneys of the registered
office for additional shielding. In most offshore jurisdictions the
registered agent must hold the bearer shares under lock and key.
Under Belizean law, only a foreign IBC can hold title to shares of
a company that owns real estate in Belize. Here is an example of the
mechanics of an offshore ownership structure:
The purchasers would hire a Belizean attorney to remotely form a Panamanian
IBC through the Belizean attorney's corresponding Panamanian law firm.
Bearer shares would be issued in the name of the purchasers and would
be held in trust at the IBC's Panamanian registered office.
The
purchaser would then form a Belizean company and issue the shares
to the Panamanian IBC. The directors of the Belizean company can be
either the purchasers or the Purchasers' Belizean attorney.
Title
to the property would then be taken under the name of the Belizean
company. Under this ownership structure, the purchaser would have
complete anonymity of ownership and absolute isolation from any personal
liability. The cost to set up this structure would be approximately
$US 1500 for the IBC, $US 1000 for the Belizean Company and around
$US 1500 per year to keep both companies in good standing. Ownership
under this structure can be very appealing to purchasers of larger
commercial facilities and to individuals requiring high degrees of
privacy.
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Question:
Can North American Governments investigate my investment activities
in Belize?
Answer: Yes and No. Belize is an offshore nation that does not have
a tax treaty with the USA or Canada. However Belize will co-operate
with these countries if there is sufficient evidence that a person
or entity has been involved in criminal activities and/or money laundering.
Belize has modern offshore banking legislation, including a tough
anti money laundering act, which is designed to repel illicit monies
and persons from using our offshore protectionism. A legitimate foreign
investor can invest in Belizean property through offshore instruments
and enjoy all of the benefits of complete offshore privacy.
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Question:
Can I get title insurance?
Answer: Yes but it is not necessary unless it is tied into some form
of international bank financing package on a sizeable purchase. Stewart
Title out of Texas issued its first policies in Belize about 10 years
ago. Belize is the only country that we know of, where an A+ American
title company has felt comfortable enough with the security of a Central
American nation to guarantee title. In our opinion, a TCT, Land Certificate
or clear Deed of Conveyance, which are all guaranteed by the Government
of Belize, are as secure a title as one can obtain in any commonwealth
country or in the USA and Canada.
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Question:
What are typical closing costs?
Answer: This is very straightforward. In Belize, we do not have a
capital gains tax so the Government assesses a 5% 'stamp tax' on the
declared purchase price of the property at the time of transfer of
title. On an outright purchase, legal fees for title research and
title transfer typically run at 2% of the purchase price. Legal fees
for drafting and recording an Agreement For Sale and Caution run between
$US 300-750. It is customary that the purchaser pays for all closing
costs under Belize transactions.
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Question:
Do I have to retain an attorney to purchase property?
Answer: Not necessarily. There are some very experienced and reputable
paralegals in San Pedro who have been dealing with Ambergris Caye
properties since day one. In most cases, they will be ultimately more
familiar with the title history of our local properties than the Belize
City based law firms. One will find that the paralegals will be more
efficient in communications and finalizing one's purchase. Obviously
the decision as to which way to go should be analyzed on a case-by-case
basis.
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Question:
Are most purchases consummated in US Dollars?
Answer: The majority of properties on Ambergris Caye are bought and
sold in US Dollars. This gives the purchaser a high degree of security
against taking a local 'currency hit'.
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Question:
Is local financing available?
Answer: Yes, however most non-residents will balk at the interest
rates. Effective local interest rates are currently in the range of
12-14% with fixed terms of only 12 months. At the end of every year
the loan is closed out and then renewed at the current lending rate.
Local borrowing is only permitted in Belize dollars and thus is not
applicable under most property purchasing scenarios. However we can
assist a purchaser in borrowing US dollars through Belizean offshore
banking institutions. Effective interest rates are approximately 12%
and the banks usually require that they be 50% collateralized. Belizean
offshore banks are not permitted to loan to persons residing in Belize.
Another option available is “owner financing”.
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Question:
What are the procedures for seller financing and how am I protected?
Answer: In most instances on Ambergris Caye, the seller financing
your purchase would be a North American developer or landowner. Most
people are familiar with a Land Contract and the Belizean equivalent
is called an Agreement For Sale or Memorandum of Sale. An Agreement
or Memorandum, under Belize law, is a valid and binding contract that
vests the purchaser with an equitable interest in the property concerned.
Once such an agreement has been registered or recorded at the Land
Registry, it constitutes notice of that person's interest as 'Equitable
Estate'. The 'Legal Estate' does not pass to the purchaser at this
point but the registered Agreement or Memorandum acts as a lien and
security for such title being eventually transferred. The titleholder
can no longer enter into any other contract on the property or mortgage
the property. Legal Estate will be passed at such time when the purchaser
satisfies all conditions of the agreement, which is when full payment
has been made to the seller. When an Agreement or Memorandum is associated
with property falling under the New Registration Act, an additional
document called a 'Caution' is lodged in the property's register to
act as a similar lien in the Registered Lands Department.
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Question:
What is the process for purchasing a property in Belize?
Answer:
The first step is to submit an offer to the seller. Offers must be
submitted along with a minimum of 2% earnest monies deposit with Triton
Properties. The offer form is legally binding to both parties and
includes an adequate due diligence period for the purchaser.
Upon
acceptance by the seller, the purchaser will then retain a local attorney
if needed. Once satisfactory title research is completed, a recordable
Agreement For Sale, or original title transfer instrument will then
be drawn up based on the particulars of the original purchase offer.
The
balance of the monies payable for either the down payment or the full
purchase price will be due for deposit to our stateside company escrow
account at the time specified on the purchase offer or Agreement for
Sale.
The
transfer documents will then be executed and delivered to the purchaser's
attorney for review. The attorney will then send us copies and notify
us that the documents are in order and will instruct us to release
the seller's escrowed funds.
The
executed documents will subsequently be processed at the Lands Registry
and an original title or certified copy of an Agreement for Sale will
then be presented to the new owner in due course.
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Question:
How long does it take to close a sale?
Answer: Typically 30 to 60 days.
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Question:
Should I involve my US attorney in my Belizean property purchase?
Answer: US property law is significantly different from British property
law. Unless your attorney is a British property law specialist, with
a sub-specialty in Belizean property law, we recommend that you do
not incur the additional costs and headaches involved with retaining
two attorneys. We can recommend an experienced Belizean law firm to
represent your interests if needed.
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Question:
Do I have to be in Belize to buy or sell property?
Answer: No. Many transactions are completed where either the purchaser
or the seller is not in Belize. The documents are Fedex'd to the absent
party and executed in front of a notary public. Purchase offers can
be completed by facsimile, which is legally binding in Belize.
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Question:
Can I open a bank account in Belize if I am not a resident?
Answer: Yes, it is simple to open up a Belize dollar account with
any of our local banks. All that is needed is a copy of your passport,
a mailing address and a bank reference letter. One can also open up
a US dollar account through one of our Belizean offshore banks. The
requirements are similar to the above but one cannot be a resident
of Belize and hold an account. However one can however form an IBC,
which is considered non-resident, and maintain a US dollar account
through this company.
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Question:
What are the rates for property taxes on Ambergris Caye?
Answer: Taxes are very affordable. Most properties are taxed at 1.5%
of the assessed value. Assessments are usually at 10-30% of the market
value.
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Question:
Tell me about Belizean surveys?
Answer: Most Belizean surveyors are educated in the UK or Canada.
Surveying in Belize is not taken lightly and there is a strict apprenticeship
process that one must go through before becoming licensed. We have
found our surveyors to be efficient and extremely precise. The survey
plat of a parcel or sub-division is only valid once registered, examined
and approved by the Commissioner of Lands.
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Question:
Are Squatters a concern in Belize?
Answer: No. Belize has tough anti squatting laws unlike Costa Rica
and other Central American countries. One can only claim title to
a land or easement upon proof to the Supreme Court of Belize that
one has had continuous and undisturbed possession for 30 years on
National and Conveyed lands and for 12 years on Registered lands.
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Question:
What about property insurance?
Answer: Good all perils (including Hurricane) insurance is available
here on buildings and structures through local insurance companies
who are re-insured through US and European carriers. Rates run from
1.5% for concrete structures to 2.5% for wooden structures. Deductibles
are normally 5% of the sum insured on storms and less for fire.
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Question:
Do I need to be concerned about hurricanes?
Answer: We have to be on the lookout for hurricanes while people in
other countries need to be on the lookout for tornados, earthquakes,
forest fires, floods and most recently, big terrorist bombs. These
are the realities of life. Fortunately, Belize is tucked down in the
South West corner of the Caribbean, which is far from the steering
currents of the hurricanes and thus out of the traditional hurricane
paths. Historically, Belize has experienced a major hurricane every
20-30 years. Ambergris Caye was hit by a hurricane in 1942 and then
in 2000.
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