Purchasing Real Estate in Belize? Ask These 7 Questions First!
Are you thinking of purchasing a vacation home in Belize? Perhaps you plan on retiring and moving to this beautiful country at some point. Maybe the plan is to purchase vacant land and eventually build a residence or business there.
Whatever you have in mind, it helps to know a bit about the market and what steps are involved with making a real estate purchase. Here are seven of the most common questions people have about buying residential or commercial property in Belize.
1. Do I Have to be in Belize to Purchase a Property?
The good news is that you don’t have to be physically in Belize in order to purchase any type of property. It’s possible to seek help from an agent who will act on your behalf. That agent can be a real estate agent or some other trusted party who will look out for your interests.
Remember that the internet makes it much easier to take virtual tours of homes and other properties. By working through a registered agency, you can go on one of those tours, ask questions about the property itself, the location, and anything else related to a possible purchase.
Assuming that you find a property that’s a good fit, your agent can guide you through all of the documentation and other aspects related to the purchase. If you have a checking account, lifestyle account, or some other financial account based in Belize, things may move along a little faster. Even if you don’t have accounts yet, there are still ways to proceed without any prolonged delays.
2. How Difficult is the Process?
Compared to real estate purchases in other countries, the process in Belize is simple. There is the need to establish proof of identity, confirm financing if you’re not paying for the property in full, and in general make sure that there are no questions about how the seller will be paid or who will own the property once the transaction is completed.
This is another area where having someone to act on your behalf is a good idea. Even if you happen to be in the country, someone who understands real estate laws and can manage the financial aspects for you is a good idea.
3. Is It Possible to Pay for the Property in US Currency?
Currently, it’s possible to purchase properties in Belize with US currency. There’s also the option of making the purchase in Belize currency. The rate of exchange between the two currencies is constant. You can expect the rate to always be stable at two Belize dollars for every US dollar.
For buyers who are using other currencies, look closely at the current rate of exchange. Unlike the relationship between the US dollar and the Belize dollar, there is no permanent pegged rate. That’s one reason why many buyers choose to utilize bank accounts that are either denominated in Belize dollars or are at least denominated in US dollars.
In the event that you do need to finance the purchase, there is more than one option open to you. Some owners are willing to work out the terms for financing the property. Your lawyer can review the terms of purchase and ensure they are in full compliance with current laws. As with any financing arrangement, you would need to make the payments on time and would receive full ownership once the debt is settled in full.
You can also obtain financing from a local bank. This is especially true if you already have a checking, savings, or another type of account with the bank. In this scenario, the bank would help with any questions you have about exchange rates, transferring funds from domestic accounts to your offshore accounts, and even setting up automated payments.
There’s also the option of obtaining financing from an institution in your home country. Many of them will work with banks in Belize to ensure that all transfers of funds are completed on or before each payment’s due date.
4. Do I Need Legal Counsel to Help with the Purchase?
While it’s not required to have legal counsel who works specifically for you, it’s generally recommended. A real estate lawyer based in Belize can provide a number of services designed to protect your interests. For example, the lawyer can conduct a title search and ensure that the deed for the property is clear of any tax or other obligations. If there are any questions as to ownership, the lawyer can identify those and make sure you’re aware of them.
Your legal counsel can also review all of the documents related to the sale. That includes the financial transactions, the registration of the new record of ownership, and even ensuring that you understand how and when property taxes must be paid.
5. How Long Does It Normally Take to Close the Sale?
Several factors will influence how long it takes to close the sale. The type of property will have some impact since there are matters to address with commercial properties that usually do not relate to purchasing residential properties. If a bank or other public holiday takes place while the sale is in progress, that could delay things by a few days.
On average, expect the closing process to take somewhere between 30 and 90 days. Assuming there are no complicating factors to resolve, everything should be completed closer to the 30-day mark than 90 days.
6. What Can I Expect in Terms of Closing Costs?
Many people are surprised to learn that closing costs in Belize are easy to calculate and are often lower than buyers expect. One of the reasons why the costs are so low is that Belize does not have any type of capital gains tax.
You will pay what’s known as a stamp tax. The tax is calculated based on the declared purchase price of your new property. Currently, the first $10,000 of that declared price is deducted from the total used to determine the stamp tax.
One point that you should keep in mind: in Belize, the buyer is the one who normally pays the closing costs. While you can inquire about some other arrangements, it’s best to work through your legal counsel to determine the amount due and ensure these costs are remitted in a timely manner.
7. Are the Property Taxes Affordable?
Another pleasant surprise awaits you when discussions of property taxes arise. You’ll find that most of the properties in Belize are assessed at an average rate of 1-1.5% of the unimproved value of the property.
Your lawyer can provide an idea of the amount of property taxes involved. This is often based on historical data, as well as information about current property values in the immediate area. While there may be a slight variance from one year to the next, you can expect the property taxes to remain affordable.
Connect with a Belizean Bank
Do you have other questions about purchasing property in Belize? Talking with a representative at a local bank will provide many of the answers you seek. The real estate lawyer that you select can also help with many of those questions. With the help of professionals, it’s possible to find the right type of property, ensure its within your price range, and protect your interests every step of the way.
Caye International Bank on Ambergris Caye island in Belize can help you establish appropriate accounts and work with you to secure a real estate loan for your Belizean dream property.