Advice on buying Belize Real Estate Property

You have found an Belize property you wish to purchase what next?

Buying Property in Belize - Costs of Purchasing Belize Property

Belize Property Buyer's Guide explains the legal fees, legal procedures, purchase taxes and mortgage procedure.

Belize is a commonwealth member country, Belize's legal system is similar to that of the English system.

In general, foreign non residents may acquire properties in Belize. Both freehold (i.e. fee simple) and leasehold properties are available in Belize.

However it is noted that Belize's Alien Landholding Act imposes certain restrictions for foreigners to acquire property in Belize. According to the Act (revised edition 2000), "aliens" are defined as a person or a company other than:

A Belizean citizen or a citizen of a Commonwealth Country;

or A person domiciled in Belize and who has been so domiciled for an uninterrupted period of over three years;

A company incorporated in Belize and deemed not to be under alien control

The Act stipulates that unless a license is granted, "aliens" may only acquire land and title "if the same is situate within the boundaries of a city or town and the total area held does not in the aggregate exceed one-half acre or if the same is situate outside the boundaries of a city or town and the total area held by any alien does not in the aggregate exceed ten acres.

Belize has three property registration systems - Deeds Registration, Private Conveyancing and Torrens System. Which system is to be used depends on the location of the subject property. Therefore, buyers are suggested to consult experienced local conveyancing lawyer to give appropriate conveyancing advice and carry out the property acquisition procedure accordingly.

Belize is widely recognised as a tax haven, benefiting from zero capital gains tax and inheritance tax. However, property buyers need to be aware that Belize is not a tax free country. Therefore, buyers are suggested to understand the tax implications before acquiring properties in Belize.

BUYING PROCEDURE:

In general, property buying procedure in Belize is as follows:

Reserve the property

Once you have chosen your ideal property, a reservation agreement is to be signed with the seller and a reservation deposit needs to be paid (will form part of the purchase price).

Due Diligence

Before signing the preliminary purchase contract (off-plan property) or property sale and purchase contract, it is important that to carry out a due diligence check on the seller as well as the subject property. The due diligence checklist may include:

the company registration certificate (if the seller is an entity) or proof of seller's identity (if the seller is a private individual)

proof of a personal who is duly authorised to sign all legal documents (if the seller is an entity or an attorney of the seller)

the title certificate for the land

the planning permission/consent (off-plan property)

the building licence (off-plan property)

all other relevant permissions for the commencement of the project (off-plan property)

any lien, debt, development finance, or encumbrances against the land and/or the project

at least one of bank guarantee, insurance and/or assurance ensure the completion of the project or an escrow system to provide security for the buyer's property payments (off-plan property)

an independent quantity surveying (QS) system during the construction period (off-plan property)

The above due diligence check is more appropriate to be done by a local law firm or conveyancing lawyer.

Exchange Contract:

Before signing preliminary purchase contract (off-plan property) or property sale and purchase contract, buyers are suggested to consult a local law firm or conveyancing lawyer on analyse the risk, any unfavourable terms of the contract. Upon signing of the contract, first instalment/payment is often required.

Signing The Title Deed:

There are three different real property title systems in Belize and which system is to be used depends on where your property is located:

Deeds Registration (not yet available everywhere in Belize) - when application for transfer is made, a new Land Certificate is issued to the purchaser. The owner holds a Certificate of Title, and this, together with the relevant Land Register entries is the proof of ownership.

Private Conveyancing:

Involves the transfer of land by conveyance and registration. In order to assure that the seller actually owns the land, a title search must be made in the Lands Unit in Belmopan to unearth the chain of title and to uncover any encumbrances such as mortgages.

Torrens system - which involves a First Certificate of Title followed by Transfer Certificates of Title.

Under this system, the charges or encumbrances and the transfers from the title are shown on the relevant Certificate, so no further search is normally needed before the new Transfer Certificate of Title is issued, following the application for transfer. Unlike the Torrens system in other countries, the Belize system is not backed up by title guarantee.

Taxation when acquiring/purchasing property:

Stamp Duty 5% if the price more than US$10,000 upon registration of the title

General Sales Tax (GST) 10% upon registration of the title

Registration Fee US$7.5 upon registration of the title

New Title Fee US$7.5 upon registration of the title

Central Bank Approval US$50 upon registration of the title

Inspection of record US$50 upon registration of the title

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These guidelines are meant for guidance only and describe a straightforward purchase scenario. However this information is not meant to replace proper legal advice, which we always insist you take.

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