Although the idea of purchasing land in a foreign country may initially seem as a daunting leap, in Belize the process is relatively straightforward, and to a great extent follows procedures similar to those in Canada, USA, and the UK. What makes the process even easier to follow is the fact that contracts are draft in English and the laws are based on the English legal system.
Unlike other countries in the region, subject to an anti-money laundering and terrorist funding check by the Central Bank, citizens of any country can buy and own land in Belize. Another benefit of buying land in Belize is the fact that there is no Capital Gain Tax. This means that if you later sell the property for more than what you purchase it for, there will be no extra tax on the money you gain. The following are nine prudent steps to buying land in Belize.
Step 1 – Conduct a needs analysis
It is very important that you start the process with a crystal clear idea of the type of property that will satisfy your needs. Divide your desires between substance and style. Those factors that would be relatively easy to change, such as the color, furniture, interior and exterior decorations would be style. On the other hand, location and factors such as size, etc, that would be costly to change are substance. The determination of an acceptable property would therefore pivot on those substances that would not be open to compromise. With a clear idea of what type of property would be acceptable it is now time to conduct your search for that property.
Step 2 – Desk research
As with any other investment, research is key. Unlike most other countries there is currently no MLS in the Belize real estate industry. As a result there are 100s of webpages and websites offering property for sale in Belize. The World Wide Web is filled with scammers and therefore a degree of caution must be exercised when gathering online real estate information.
With the above in view, a good start would be to examine the websites of those realtors who are registered with the Financial Intelligence Unit (FIU), the regulatory authority for real estate practitioners in Belize. You can find the list of FIU registered Real Estate Practitioners here.
Step 3 – Engage a buyer’s agent
Having decided whether your desired property should be on the mainland or on an island, water front or water view, acreage or residential, urban or suburban, on or off-grid, built or home-site, single or multi family, coastal or inland, etc, you can now engage a Buyer’s Agent who will be able to assist you in streamlining your search and provide you with options for your consideration. It is strongly recommended that you work with a reputable broker who is a member of the Realtors Association as they are subject to a code of conduct. Here is the directory of members of the Association of Real Estate Brokers of Belize (AREBB).
Step 4 – Narrow your focus and conduct a physical inspection
In the real estate field it is often stated that ‘you get what you inspect, not what you expect’, Therefore it is strongly recommended that you narrow your list of prospective listings and schedule a few days to conduct a physical viewing of the properties of interest. This discovery trip should result in about 3 properties on your short list.
Step 5 – Due diligence
Before you make any payment it is very important that a Title Search of the subject property is carried out to ensure that no encumbrances exist that would prevent or delay the transfer of the property from the seller to you the buyer. Your broker/buyer’s agent should be able to assist you with this important step. If you encounter any significant issues with the title of your most desired property, then move to your 2nd and 3rd option as needs be.
For reason that majority of properties in Belize are being sold on an ‘As Is’ basis, you should arrange for an inspection of buildings on the property and verify that the land survey pegs/markers on the ground corresponds with the Land Survey Plan for that property. It must also be verified that the seller is in possession of the Original Land Title Certificate. Your Buyers’ Agent should be able to assist you with this.
Step 6 – Make an offer and ‘Good Faith Deposit’
Once your title search comes back with a clear and free Lands Registry Report, then your next step is to make an offer. Your Buyer’s Agent/Broker should be able to draft up the formal ‘Offer to Purchase Letter’. This document contains the buyer and seller details, the legal description of the subject property, the price being offered, the period for which the offer is valid, and your signature. Your offer will either be accepted as is, rejected outright, or met with a counter-offer. If you cannot come to agreement on terms, then you move to your second most desirable, and third if needs be. Once the price is mutually agreed upon, the seller should sign the Offer Letter to record his formal acceptance. At this point you will be required to make a ‘Good Faith’ deposit. The standard acceptable sum is 10% of the agreed price.
Step 7 – Purchase Agreement
The next step is to enter into a legal contract for the purchase of the subject property. Again this is a function that your Broker/Buyers’ Agent will be able to guide you through. This contract legally binds the seller to sell the subject property to you and binds you, subject to the Central Bank’s approval, to purchase the subject property. Your Broker/Buyers’ Agent should be able to assist with the Central Bank application submission. For this you will need to provide proof of identity (a color copy of your passport photo page), and proof of address (recent utility bill with your name and address).
Step 8 – Payment and execution of the Land Transfer prescribed form
Upon receipt of approval to purchase and own land in Belize from the Central Bank, your next step is to execute the Transfer of Land Ownership document and make the balance of the purchase price. The prescribed Land Transfer forms (in duplicate) must be signed in the presence of a Justice-of-the-Peace if in Belize or a Notary Public if done outside of Belize.
Step 9 – Stamp Duty and Registration
Your final step is the submission of the Land Transfer prescribed form together with the Stamp Duty which is to be paid to the government of Belize. The current rate is 8% of the purchase price less a deduction of the first $10,000 US. Note that the government reserve the right to make an assessment of the purchase price in which case the stamp duty would be based on the assessed value of the property as opposed to the declared purchase price. Once the Stamp Duty is settled, a new Land Title Certificate will be issued showing the buyer as the new owner of the subject property. The seller’s name will be struck-off the Lands Register and an entry made showing the buyer as the registered owner of the subject property.
Following the above steps will save you time, money, and stress. The average turnaround time is between 90 and 120 days. Some cases are quicker while others take a bit longer. Once you have your government of Belize issued receipt from the Lands Registry with an instrument number allocated to your land transaction it is merely a waiting game thereafter. Your Purchase/Sale agreement will normally specify when you can take possession and control of the subject property. This is normally at the point where the balance of payment is made and the Transfer of Land form is signed. At that point you are legally free to take control and start enjoying your new home.
Visit us at www.shepherdbelizerealty.com for more Belize real estate buyers’ resources.
This is normally done by the buyers agent as part of the process.
Paid for as part of the commission received.
Is my assumption correct?
Yes for the most part. Some of the functions however, such as the title search, legal processing, and recording are done separately by a closing agent. This is however covered in the 10% closing fee which includes 8% Stamp duty, and the other 2% covers legal processing and title search.