Buying Cayman Real Estate

You might think buying Cayman Islands real estate is tricky, we’re here to tell you it can be straightforward with the right help! We’ve created the ultimate guide to buying Cayman Islands real estate with all you need to know to make that dream a reality.

Owning real estate in the Cayman Islands is truly a dream come true, and that’s something we feel grateful to be a part of every day. After all, we do live in paradise.

However knowing how, where and when to start your property journey can seem confusing and overwhelming. Don’t fret. Below we break down the basics of the purchase process, the state of the current Cayman property market and 5 things you should consider before buying a property in Cayman.

Let’s jump right in.

The (Fairly) Straightforward Process

Luckily, the process of buying property in the Cayman Islands is relatively straightforward (most of the time). The Cayman Islands operates the Torrens system of land registration, which is also in operation in Canada and Australia, and this system is generally considered to be simple and effective.

The Cayman Islands government guarantees absolute  ownership of each parcel of land, there are no restrictions on foreign ownership of a single property and there is zero  income tax, zero capital gains and zero property tax. On the basis of this so-called “statutory guarantee”, obtaining title insurance is generally considered unnecessary in the Cayman Islands.

Generally speaking, the transaction takes place in two stages: i) negotiating an offer and ii) closing the deal. Two things we do every single day and would be happy to help you out with.

In terms of paperwork, the most commonly used contract (and something we wholeheartedly recommend) is the standard agreement created and regulated by the Cayman Islands Real Estate Brokers Association better known as “CIREBA”, and this sets out all the terms and conditions of the transaction. Closing then occurs upon the  satisfaction of the contract (conditions) and payment of any outstanding fees (lawyers, stamp duty, government fees etc), at which point title to the property is transferred from seller to buyer and recorded at HM Land Registry.

Bingo, you’ve just bought your own slice of paradise!

The Cayman Property Market

To encourage a buoyant economy, the Cayman Islands Government is proactive about attracting foreign direct investment and, to this end, has an open market policy that welcomes foreign ownership. Be that multinational corporations, private investors, property developers, hoteliers, international financiers and expatriates looking for a  second home or buying into this desirable market. The Cayman Islands real estate market is open for business.

With several major enhancements to the country’s infrastructure underway, including the airport and expansion projects, highway upgrades and (like it or not) the cruise ship berthing facility, both foreign investment and tourism gain momentum in Cayman’s current market. With these areas of strong growth currently, there is a steady demand for short and long term rentals, both of which present further potential for capital  appreciation in Cayman real estate.

If you’re interested in delving into the stats and trends of 2018 and how these apply to you in 2019,  we’ve put together a detailed analysis here.

6 Things To Consider

Before making arguably one of the biggest decisions of your life, there are some important things to think about. Here are our top tips to consider before buying real estate in the Cayman Islands.

1. Determine What YOU Can Afford

One of the most important steps you can take before starting the process of buying a property is to determine  what you can afford.

It can be really heartbreaking to fall in love with a property that’s way beyond your budget. Whilst at the time of buying you might be able to afford a property, life happens, situations change, mortgage rates increase and what was once affordable, now becomes impossible to pay.

We see it all too often where buyers borrow more than they can afford and unfortunately are foreclosed on by their bank.  80%, 90% or even 100% bank financing to buy properties that they can no longer afford to maintain. We strive to ensure this never happens by helping our clients truly assess what they can comfortably afford eg:

What savings do you have available as a deposit?
If you require a loan, what are you able to borrow?
What funds do you have to cover eg any costs associated with closing (stamp duty, government fees, bank fees and lawyers fees)?

2.  Timings and Future Lifestyle

Another important thing to consider is your current timeline. This can be done by answering some questions:

Will you be remaining in Cayman for the foreseeable future and if so will you continue to work for the next 10-15 years?
Have you considered your eligibility for permanent residence (PR) or do you already have residency?
Will you be having children in the near future or will children be moving out soon?
What size of property will you need to service your lifestyle for the next 10-15 years?
Do you have pets or want pets in the future?

3. Location, Location, Location

It may sound like a real estate cliché but the truth is location is everything. The location of your real estate investment is important not just to you, your lifestyle and your needs but also for the appreciation of your investment.

It’s no surprise to learn that there are popular areas in Cayman that will always hold their value, namely world-famous Seven Mile Beach and beachfront South Sound. However, there are also areas where there are opportunities for solid growth for those who get in early. Areas of West Bay, Spots and Rum Point have seen significant appreciation in recent years.

Working in the real estate industry, we are often the first to hear about future roads, new developments and government investment which means we can help you make an informed decision on where is best to buy and when!

4. Do Any Exemptions Apply?

For certain fortunate buyers there are some really beneficial exemptions that are worth considering.  If you are Caymanian first-time buyer there are stamp duty exemptions available to you depending on the location and type of property you’re buying, be that land, a home or condo, or pre-construction investment.

The Cayman Islands Government has good news for Caymanians looking to buy their first homes as the changes to stamp duty in The Stamp Duty (Amendment) Bill 2018 (‘Bill’) propose significant increases in the thresholds for stamp duty concessions to help ease the financial burden on first-time Caymanian property buyers.

At present no stamp duty is payable by Caymanian first-time buyers on the purchase of their first home with a value of CI$300,000 or less or undeveloped ‘raw’ land with a value of CI$100,000 or less.

Assuming the proposed Bill passes without amendment, the proposed law will increase these thresholds and remove the requirement that the buyer live in the property, so that no stamp duty is payable by Caymanian first-time buyers on the purchase of land and buildings (whether established or part of a to-be-constructed development) with a value of CI$400,000 or less, or raw land with a value of CI$150,000 or less.

If you’re a first time Caymanian buyer, get in touch to ensure you receive up to date advice to take full advantage of these thresholds, at the best time. You only get one shot at this and the Bill amendments are not set in stone!

5. Think About Your Exit Strategy

Second to location, this is arguably the most important. It’s easy to get wrapped up in the “here and now” when buying a property. You fall in love with a brand new kitchen, backyard or master bedroom, but don’t consider what happens when you come to sell that property. Unless you intend on passing your property down through generations, one day you’re going to need to sell your property and certain considerations matter more than others.

Whilst it may seem like a great buy now, is it going to appreciate in value during the time that you own it, and are you going to be able to sell (or rent it) easily when the time comes? The answers will be very different whether you are buying a house to live in for the next 5 years, as opposed to your forever after home that you might be in for 20 years. . When buying a property, always think about your exit strategy.

6. Hire The Professionals

You think it’s expensive hiring a professional, wait until you hire an amateur. As a property buyer in the Cayman Islands, there’s absolutely no cost to you in hiring a real estate agent as any commission is paid by the seller.It’s a win win. Expert advice, zero charge.

Your team at Property Cayman will work FOR FREE (yes, we’re shouting) to find you the perfect property, be that a condo, house or land, which will know will best suit your current and future lifestyle based on its location, size or price.

As members of CIREBA we have access to all properties (currently over 1,400) for sale on CIREBA’s multiple listing system (the MLS). This means our agents can research a wide range of properties available as well as details like strata fees, days on the market and past sales prices – powerful information when negotiating a purchase. This saves you an enormous amount of time and energy which might otherwise be wasted on unsuitable or unavailable properties.

Once we’ve found your dream property, we will guide you every step of the way to help you  seal the deal. When both parties have agreed on the price, the buyer is usually required to pay a deposit as a sign of good faith and part payment of the purchase price (generally, 5-10% of the agreed purchase price). Closing and transfer of the property can take place rapidly but the process usually takes in the region of 30 to 45 days (if using bank financing). The closing date will be a term of the contract so that each party is fully aware of the time frame in which they must operate. Something which we won’t let you miss!

If you’re thinking of buying property in the Cayman Islands, and you’d like to work with one of the most experienced teams in the business, get in touch today by clicking here.

We’d be thrilled to help you make the right choice for you.