International property investors have been buying Cayman property for the past few years in ever increasing numbers. Grand Cayman has been the primary focus of property buyers' attention, but there are also opportunities for ownership on Cayman Brac and Little Cayman.
There are no imposed requirements to develop land (excluding subdivisions which do have Covenants) within a stipulated time period; consequently, parcels can be held indefinitely, with little or no expense, for future use or speculation.
The title to property in Cayman is "absolute" (fee simple). Based on the Torrens System, each site has a property register which can be obtained at the Lands and Survey Department showing its legal description, history of ownership, and record of liens.
Government guarantees title through this document making title searches unnecessary. A one-time Stamp Duty is paid to the government on all transactions involving land, at time of purchase, to register transfer of title.
There is no direct form of taxation levied within the Cayman Islands - no taxes on income, profits, capital or capital gains, property or inheritance.
There is a standard stamp duty of 7.5% payable to the government on all property purchases. There is also a 1% stamp duty payable on mortgages up to CI$300,000 (approx. US$240,000) and 1.5% stamp duty on mortgages exceeding this value.
Transfers in consideration of "natural love and affection" that is, transfers between for example husband to wife, or father to child, may be approved by the Financial Secretary for payment of minimal stamp duty.
Additionally, when an individual desires to transfer title to a company of which he is the sole beneficial owner, the Financial Secretary may approve a deduction of the full amount of all stamp duty on such transfer.
Financing can often make the difference in getting the home of your dreams, or not. That's why it's important to talk to a mortgage loan professional (broker) before you start house hunting. They will take the time to explain the options available to you and recommend a loan program designed to meet both your short term and long-term objectives.
Interest rates for real estate in the Cayman Islands are based on prime plus one or two points as quoted by Citibank. Standard mortgage terms require a 10-35% down payment plus closing costs, at a rate of 1 or 2 percentages above the prevailing prime rate.
Mortgages are normally amortized over 10 to 15 years; some lenders offer 20-year terms. Most financial institutions do not charge pre-payment penalties. The property you are purchasing will be your collateral, but your personal balance sheet must indicate that you can afford to make the repayments.
Non-residents may open bank accounts and obtain a mortgage, generally based on 70% loan to value, and bank accounts may be in the name of the client or in a Corporation.
It is illegal under Cayman Law for any institution or individual to divulge any financial information unless it can be proven that the funds were obtained through illegal means such as drugs, fraud or theft. Interest on money borrowed in Cayman is tax deductible in most countries.
A stamp duty of 1% of the sum less than CI$ 10,000 (above CI$ 10,000 is 1.5%) secured by the mortgage must be paid to the Cayman Islands Government. In nearly all cases the duty is paid by the borrower, particularly, in cases involving a lending institution.
There are a number of real estate companies in the Cayman Islands with agents that are more than willin to help you find your new rental property or home. For a comprehensive list of real estate companies please click here.
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