A number of quality (international and local) insurance companies exist on the island and rates for insurance vary between the different companies. As a guideline property insurance costs around 0.4% for residential property and between 0.6% and 0.8% for commercial buildings. Hotel insurance costs about 0.9%. All properties of course, are valued individually and the final rate charged depends upon the characteristics of the building and the site itself.
Running costs
Other costs you need to consider either when you live in your own property or whether you purchase property you’re renting out in Barbados will attract monthly bills for your water service from the Barbados Water Authority and your electrical service from the Barbados Light and Power company.
Depending upon where you live, if you are attached to the local sewage system you will be billed accordingly but alternatively a deep well is dug on your land to deal with your drainage and sewerage.
Your telephone and internet connections are billed monthly, but like all of these bills they can be paid online.
If you’re non-resident in Barbados there’s a high probability you will be expected to make advance payments to cover the usage for water, electric, telephone and internet, in advance.
All of these providers will require that you present yourself at their offoces for the completion of application forms, not an online application.
Agents fees
You should allow for approximately 10% to cover your total costs when you’re selling a property. The seller will pay a transfer tax of 2.5% (whether you’re resident or not the rate is the same) and stamp duty of 1%. If you factor in your legal fees of 1.5% and real estate agents fees of about 5% you’ll see how the 10% figure is calculated.
Villa rentals
There’s a number of tax decisions you need to be aware of if you own a villa in Barbados if you have a certificate from the Barbados Tourism Authority (which means you’re registered through them rent out your property.) You’ll receive a rebate of 25% of your land tax bill.
Property owners who want to rent their property on the short-term rental market must charge 7.5% VAT on top of the rent. This registration for VAT lets the property deduct VAT on input costs.
Any property profits made from the regular rentals will be subject to income tax in Barbados.
Hotels
A quirk of the Tourism Development Act 2002, means that the land tax for hotels registered under the act is calculated at half of the improved value rates of the land.
Take advice
It’s essential that you take proper professional advice from real estate agents, official bodies, architects and builders to ensure the Process of buying and building is completed efficiently and competently. The process will take longer than you expect. It’s a hot country for builders to work in so don’t expect to build your palace in a couple of weeks. The good news is because the legal system is respected throughout the world title to your property will be 100% guaranteed.
Please go look over parts one and part two of this guide.
(Photo: Abeeeer)

Planning permission

