For anyone looking to buy property in Belize, this guide gives a first class starting point
Belize is the only English-speaking country in Central America and has retained strong links with the UK.
The country still recognises Queen Elizabeth as sovereign, as well as being fully constitutionally independent.
Located on the eastern coast of Central America and with some 450 islets dotted along its coastline with the Caribbean Sea, Belize is also home to the second longest coral reef in the world.
Tourism, and scuba diving in particular, is the major driver behind the country’s economy, while production of citrus fruits, sugar and bananas are the main export crops.
In recent years, Belize has become a popular destination for retirees from the US and now from the UK.
Its warm climate and the islands dotted along the coast in the Caribbean Sea mean that it is often categorized along with the rest of Caribbean, something that the somewhat colonial atmosphere of the country helps to perpetuate.
Recently however, there have been some issues with Belize which need to be considered before investing.
While they are not necessarily a barrier to buying in the country, it pays to be fully apprised of the realities before putting money down. After the successes of the property market in Belize in recent years, price rises
stalled and began to fall in late 2008 due to the global economic recession.
There is some debate as to the extent of the fall in prices – some local agents insist the fall is minimal, while other sources say that prices on some types of property may have fallen by up to 50 per cent compared to 2007.
Popular Buying Locations in Belize include Ambergris, Orchid Bay, Placencia, Corozal, and San Ignacio.
Property in Belize has been one of the success stories of the overseas property world from 2000 until late 2007, with developments that are sympathetic and fit in with the environment, as well as being modern and suited to the retirement market.
Given the position of the country on the edge of the Caribbean Sea and bordered by Mexico and Guatemala, property buying locations are largely confined at present to the coastal regions. This may change and spread out as infrastructure develops and communications in the outlying areas improve, but for the moment, the coast is where everyone wants to be.
While this means that the interior of the country is largely still to be explored by the overseas property buyers and by many tourists, the extent to which the coastline is being prepared for residential tourists goes far beyond the few miles north or south of the capital city, Belize City.
For example, there are beach resort developments that are being built more than one hundred miles from the capital on the Placencia Peninsular in southern Belize, upon an 18-mile isthmus of sand stretching out into the sea. This location is developed enough to have a regional airport with regular flights from Belize City,as well as links on the more rudimentary road system. The region also has the typical palm-fringed beaches and the powder-white sand that abounds along the whole of this coast.
Other popular areas for overseas property buyer are Hopkins and Sittee Point, both near to each other and on the Caribbean coast.
While these locations share the beach paradise traits to be found up and down the coast, they are somewhat more primitive in their infrastructure and outlook. Otherwise, there are major new developments springing up along the coast in increasing numbers. The north of the country is predominantly geared to the beaches, while in the interior the Mountain Pine Ridge is covered in the lush forests and ribboned with rivers and rafting opportunities. Further south there are pure tropical rainforests with all manner of wildlife.
The other attraction of Belize are those 450 islets out in the Caribbean Sea, and while there are not a huge number of opportunities to get out there and snap one up, should the mood take you and the prices doesn’t scare you off, there are specific cayes (private islands) available for purchase.
There are no restrictions on foreign nationals buying property in Belize, and you do not even need to seek permission or get any licenses granted in order to proceed with your purchase.
People over the age for 45 are able to apply to join the Belize Retired Persons Incentive Program, which is classed as one of the best in the world for retirees tax breaks. It was set up with the aim of attracting affluent retirees to the country with tax breaks and investment incentives, allowing them to invest in the country without impeding social services or the jobs pool in Belize.
In any purchase in Belize, make sure you employ a good, independent lawyer to oversee the purchase, more than anything to make sure the property has clean and clear title before you transfer funds.
Estate agents in Belize are not regulated or qualified in any way, so make sure you have everything very clear before you hand any money over, and do plenty of research into companies you wish to use. Equally, make sure you are on site regularly for any self-build projects you commission, as you will want to keep things moving.
The property buying process
The system of buying property in Belize is incredibly easy for all of those who are used to the buying systems in the UK, Ireland or the US.
The official language spoken in Belize is English, thus cutting out many of the biggest problems faced by overseas property buyers, caused by lack of understanding and the vagaries of translation.
Belize also operates politically as a member of the British Commonwealth, and as a former British colony has based its legal and property systems on the model of English law.
This makes the process easy and hopefully trouble-free for the majority of buyers in the country. Finally, the currency, the Belize Dollar, is officially pegged to the US Dollar at a rate of two to one, giving the market stability from the fluctuations of the currency markets to a certain extent.
Without wanting to draw any gloom over the idea of buying a property in Belize, there are some notes of caution to be highlighted.
Most importantly, you will need to have expert, independent legal advice at all stages of the buying process. Estate agents in Belize are not regulated in any way, and although there are few problems associated with this, you will want to have the peace of mind of knowing that you have clean and unobstructed title on the property you are buying. The buying process in Belize takes somewhere between 30 and 90 days. Once an offer has been made and formally accepted, and a deposit paid into an escrow account, there is a binding agreement in place between the two parties. Then there comes a period to allow for the relevant legal searches and due diligence to be completed. Following this stage, an Agreement of Sale is drawn up based upon the details of the original offer, which is then signed by both parties. This agreement also sets out the details of the payment schedule for both parties to agree, as well as any other terms and conditions.
Once the final payment or instalment has been paid over, the transfer documents will be drawn up and reviewed for signing, and the escrow accounts will be released for the seller to access.
The final stage is for the new documents to be registered officially, and you are then the owner of a property in Belize.
Financing your property
There are some specific mortgage products available for buyers of property across the Caribbean, and Belize is often classed within this bracket due to its past colonial links and the way in which property is bought and sold.
A number of the regional banks which cover the whole of the Caribbean are able to lend to overseas buyers, and often at quite competitive rates.
Generally, you will find that there are options to get 70 per cent LTV mortgages for property in Belize across a term of 20 years, and the finance is available in US or Canadian Dollars, as well as in Sterling or Euros.
Interest rates are linked directly into the US LIBOR interest rate, giving you the relative stability of being linked to a larger market. At the same time, this links you in with an economy that is not necessarily in step with the UK market, which might mean that there is movement in the market in the opposite direction to the UK.
The mortgage market in Belize is still relatively small so you may consider that raising finance from the UK on a property that you already own is the best option if your income is paid in Sterling and you prefer to keep things all together in one currency.
This will allow you to travel to Belize as a cash buyer, which could be an advantage in the more unregulated market there, and allow you to strike a better deal.
Fees and taxes
The taxes in place for buying a property in Belize are small compared to other countries in the region.
Transfer or Stamp tax is due only on properties valued at more than US$10,000, and at a rate of five per cent above this level. The average price for a luxury new-build two-bedroom apartment on one of the top new developments is around £190,000. There is an additional ten per cent tax payable on this transaction for non-residents or for those who have been in the country for less than three years.
Legal fees should come to somewhere around two per cent of the purchase cost, and there is a nominal fee of up to US$700 for the drafting of the Agreement of Sale.
Running costs of property in Belize are also low, with property tax charged at somewhere around 1.5 per cent of the property value.
Visas, residency & work permits
Residents of the UK and most members of the EU do not need to have a visa in order to enter Belize, with the same rules applying for citizens of the US and Canada.
One of the major attractions of buying property in Belize is the advantageous status accorded to overseas retirees who come to the country. This means that citizens of the US, Canada, the UK and Ireland have the right to apply for residency under the Belize Retired Persons Program if they are over 45 years of age.
This status will give them tax advantages, as well as allowing them free access to the country.
The conditions of the programme are that the person must have an income of more than US$1,000 per month (or a lump sum of more than US$12,000 per year) which is deposited in a bank account in Belize and comes from a source of income outside of the country. This source can be pension, property investment
returns, or any other source outside of Belize.
In return, the resident is then exempt from taxation on any income that comes from outside of Belize, and may import personal effects, a car and even a boat, without paying duty.
A small nominal charge is levied for registration to the program, which is outweighed almost immediately by the savings made.
Property in Belize:
Property growth in Belize between 2000 and 2007 was good, stable and reasonably reliable, but has now suffered from the contagious effects of the global recession, bringing prices down sharply in most areas.
Tourism is growing, and the government has been careful to keep the natural beauty of the coastline and rainforest as intact as possible while still allowing development to take place.
With all of this growth, property prices remain somewhat below the levels you might expect, and can be 50 per cent below the prices that are found nearby in the Bahamas.
Once direct flights from Europe begin in the coming years, expect prices to recover well and tourism to continue growing.
The last elections in Belize were held in 2008, but there has been some recent tension with neighbouring Guatemala over a border dispute. The main tasks for the new government are tackling high levels of poverty and reducing the unsustainable foreign debt of the country, as well as reducing urban crime.
One note of caution however, is that property outside of the major destinations might be difficult to reach at the present time.
The issue with transport in the provinces of Belize is that road transport can be quite sketchy at times. Try to buy in the vicinity of regional airports that will at least give you options for access while the infrastructure of the country is brought up to higher standards.
Primary healthcare in Belize is covered by a government-sponsored system, and nine per cent of the income raised by taxation in the country is spent on the health service.
Patients have to pay for some services, but again, much of this is subsidised at least in part by the government. Doctors are routinely trained in other countries, but the standard of their education is generally good.
Internal transport links in Belize are somewhat rudimentary, but investment is being put in place to make sure this improves in the near future, but for now you would be well advised to stick to some of the more well-known areas to avoid feeling cut off and isolated when you are in Belize.
There are a number of regional airports and landing strips from which you are able to access the main international airport outside of Belize City. Internationally, most flights are through the cities of the southern part of the US, which is an easy hop from the UK through a variety of different carriers from airports around the country.
The countries of Central and South America have enjoyed a recent increase in coverage and potential as overseas property destinations.
This leads to a number of different markets and advantages appearing for each of the destinations. Given the tax advantages of residency for those approaching retirement age, it may be that Belize is the destination that proves to be the most popular with those looking for a more permanent home to which to relocate in the future.
Furthermore, the fact that the scuba diving and beachfront living opportunities offered by the coastline of the Caribbean Sea will attract those who are keen on an island lifestyle at a cheaper price.
Be aware of the high levels of poverty in Belize and the current fragility of the property market before you buy, and you may find a great retirement destination waiting for you in unspoilt rainforest.