Buying a Vacation Property in the Caribbean
If you are contemplating buying a Caribbean vacation property, you need to be aware of the costs of not only buying but carrying that property. Here are just a few of the costs you need to take into consideration (aside from the cost of the property itself):
Many countries have stamp duties that need to be paid when purchasing a property. Stamp duty is a tax levied on the property. Due to the fact many Caribbean islands do not charge property taxes, stamp duty is a one time tax to make up for this lack of tax revenue. These fees generally vary by country and by amount of the purchase, however they can be as high as 10% of the homes value.
When you borrow money to purchase your new home, count on their being a stamp duty on the mortgage, as well as lender/broker fees, and legal fees. Although none of these are huge fees, they do add up.
If you are not living in the home, chances are you will want a property manager to simply check up on things or to completely manage the property and renting of the unit. The price obviously varies significantly on what they are doing for you, but it can be as much as 50% of your rental income.
Lastly, if you are renting out your property, count on having to replace pretty much everything in the home over time. Things break, wear down or simply stop working. Again, not a huge expense but remember everything costs more on the island.
