Although there is still some confusion about the changes made last week in the real estate transfer tax, especially as regards its implementation date, it appears that the new "stamp duty" rates for real estate purchases are:
15% of selling price for everyone except Belizean citizens and Caricom nationals
5% for Belizeans and Caricom nationals
Taking a big hit are Canadians, Brits and other Commonwealth citizens, who formerly had to pay just 5% transfer tax, but who now pay the same as most other foreigners.
Also, the government moved to eliminate the loophole for Belizean corporations started by foreigners who previously could get the Belizean 5% rate. (Of course, in theory one could start a corporation in a Caribbean country and move it to Belize.)
I don't know how others feel about it, but in my opinion this could be the straw that broke the camel's back regarding real estate purchases by foreign citizens.
With the 15% tax, plus attorney's fees and miscellaneous costs, the "surcharge" to buy real estate in Belize for most foreigners is now nearly one-fifth of the purchase price.
On a US$300,000 condo in San Pedro, that would be US$45,000 plus attorneys fees and other closing costs.
Guess some wealthy buyers wouldn't blink at that, but I think many ordinary buyers would find it pretty steep.
If there were a 15% surcharge upfront on real estate purchases in the U.S. or Canada, I suspect it would quickly burst the real estate bubble.
I also wonder now that the government has decided it will severely penalize foreign buyers what else it may have in store for them? Like a new non-citizen property tax rate? Or a capital gain tax for foreigners only?
--Lan Sluder www.belizefirst.com