Buying property on the twin islands of Antigua and Barbuda combine beautiful land and seascapes with a good standard of living, a beneficial business environment, and political and social stability that foster a historically secure investment environment.
Often referred to as the “Land of 365 beaches”, whether you are in the market for a holiday home, rental investment, a family abode, or your retirement hub, the Caribbean paradise offers a wide variety of properties from modest apartments to luxury beachfront villas and hotel complexes.
Where Should You Buy?
Location requires careful consideration if the investment is to be maximised. Buyers will need to choose wisely taking into account whether the property is to be used by themselves or rented by holiday makers or locals. The best areas for foreign investors to buy homes are considered to be areas where there exists an expat community, such as:
- The areas of Falmouth and English Harbor in the South East
- In and the surrounding areas of Jolly Harbor and Fryes Beach in the South West
- Half Moon Bay and Browns Bay in the East
- In and around Cedar Valley, Hodges Bay and Galley Bay in the North
Alternatively, if the investor is looking to develop business opportunities, they might do well to purchase commercial property in the busy capital of St John’s, or look to Jolly Harbor or English Harbor which have up-and-coming commercial areas.
Property prices are generally on the higher end of the scale in the Caribbean, following a boom in the early to mid-2000s.
Prices vary according to location, proximity to beaches and other facilities and the size, condition and age of the property. Average current prices are in the region of US$350,000 for a 2-bedroom house and up to around US$600,000 for a 3-bedroom property.
When investing in real estate as part of a Citizenship by Investment application, a number of requirements apply:
- The real estate must have a minimum value of US$200,000 for a joint investor or US$400,000 for a sole investor.
- The property must be approved by the Citizenship by Investment program (CIP)
- The property must be owned for five years, after which time it may be sold without affecting citizenship status.
Property Purchase Process
For non-nationals the purchase process is relatively simple, following a number of steps:
- Search for a property
- An offer is made once a suitable property has been found
- The seller is advised to find a lawyer to prepare the Deed of Sale, carry out due diligence and apply for the Alien Landholding Licence if not purchasing as part of a Citizenship by Investment application. The licence costs a minimum of 5% of the property value and can take up to four months to be approved
- The buyer pays a deposit
- The buyer’s lawyer finalises the paperwork for the property transfer
- The final payment is made for the property once the Alien Landholding Licence is granted, if applicable
- All required taxes and fees are paid
Property Tax, Charges And Fees
There are a number of charges that apply on property purchase in Antigua and Barbuda in addition to the price of the property itself. These include:
- Income Tax on rental income deriving from the property: This is charged at a flat rate of 20% with the taxable income considered to be the amount received once any income generating and depreciation expenses are deducted
- Alien Landholding Licence (ALHL): This is a requirement for any foreign purchasers of real estate on the islands and is charged at a minimum of 5% of the value of the property
- Legal Fees: The purchaser will need to allow a minimum of 2% of the property’s value. Legal costs include the ECD20 Registration Fee of around US$7.41 and the ECD50 Land Certificate Fee of US$18.50
- Stamp Duty: Both buyer and seller pay a total of around 10% of the value of the property. The purchaser pays 2.5% of the purchase price towards transfer charges, with the seller paying 7.5%
- Commission Fees: These will be payable if the purchaser engages a real estate agent, accountant, attorney or any other professional to assist them through the purchase, and will usually be around 5% to 7% of the purchase price
- If a loan is taken out in Antigua and Barbuda to pay for the property, there will be a 3% governmental tax payable
- If the property is to be leased out, the use of a real estate agent management company is recommended. They will normally charge around 10% to 20% of the rental income and will be best placed to deal with all aspects of the maintenance and rental of the property
It is always important for potential purchasers to be aware of any possible difficulties or issues that may arise. Some potential issues might be:
- Mortgages: It is not easy for a foreigner to obtain a mortgage from a bank in Antigua and Barbuda. However, the government is expected to bring in arrangements to allow low-interest mortgages from the Antigua and Barbuda Development Bank and other commercial banks in the region to be offered to expat buyers.
- Timescale for the Alien Landholding Licence: The process is rather slow and costly, taking around 3-6 months and costing around 5% of the value of the property
- Rental Yields: It is not widely advised to expect large yields from rental income on the islands. Most holidaymakers will only stay for a short while and not great demand for long-term rentals. The gross yield from rental is generally around 4% which is not considered high, considering the relatively high cost of property in the region
Becoming A Citizen
Applicants for the Citizenship by Investment program may choose one of the following options:
- Purchase of Real Estate with a minimum value of US$200,000 (it is a minimum investment for a single applicant when applying though a joint investment with another main applicant (2 individual investors with their families).
- Non-refundable Contribution of at least US$100,000 to the government’s National Development Fund. Also the program features the most cost-effective route to acquiring a second citizenship for the family through a government donation of $100,000 covering a family of 4.
- Investing singly or jointly in a local eligible business. The investment must be for a minimum of US$1,500,000 for a sole investor. A minimum of 2 persons to make a joint investment in an approved business totaling at least US$ 5,000,000. Each person is required to contribute at least US$400,000 to the joint investment.
- Applicants must be at least 18 years of age.
- They must not have any criminal convictions.
- They must demonstrate that they are able to meet the minimum investment requirements.
There are numerous benefits to becoming a citizen of Antigua and Barbuda including:
- The right to live, work and study on the islands.
- Good lifestyle with political and social stability.
- Beneficial business environment.
- No inheritance or capital gains tax payable.
- Family can be part of the application, including: Spouse, children, parents, grandparents and unmarried siblings.
- Visa-free access to over 160 countries worldwide, including the UK and Europe, Hong Kong and Singapore.
- Speedy application process – just four to six months.
- No physical residency requirements except for 5 days within five years for adult applicants.
- Dual citizenship permitted, with no need to relinquish original citizenship.
Tax on income from property rental in Antigua and Barbuda is relatively high at a flat rate of 20%, making it difficult to gain a significant return from a rental investment as previously described, with the average rental yield being only around 4%.
If the investor becomes a resident of the island they will be liable to pay taxes on their worldwide income at a progressive rate, starting at 8% and rising to a maximum of 25%.
One significant tax advantage that the islands do offer is that the investor will pay no general income, wealth, inheritance or capital gains tax and no tax on royalties, dividends and interest.
It is clear that the islands of Antigua and Barbuda offer good potential for investment in property, particularly if the purchase is to be made as part of an application for Citizenship by Investment and even more so if the investor is looking to use the property themselves rather than renting it out.
Antigua and Barbuda’s natural beauty, high standards of living and generous tax arrangements make it a popular choice for real estate investment.
Astons has an extensive and diverse real estate portfolio in Antigua and Barbuda, as well as throughout the Caribbean and around the world.
Schedule a free consultation with our highly experienced and knowledgeable international team, who are ideally placed to provide you with accurate, up-to-date advice on all aspects of property investment and Residency and Citizenship by Investment in the Caribbean and worldwide.