Taxes and Regulations When Buying a Property in Barbados: A Complete Guide

Taxes and Regulations When Buying a Property in Barbados: A Complete GuideTaxes & Finance
  • 27.05.2025
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Taxes and Regulations When Buying a Property in Barbados: A Complete Guide

Meta Title: Barbados Property Taxes & Buying Regulations (2025 Update)
Meta Description: Discover all the taxes and legal regulations for buying property in Barbados. This complete 2025 guide covers transfer tax, land tax, foreign ownership rules, and more.

Table of Contents

  1. Introduction: Why Buy Property in Barbados?

  2. Can Foreigners Buy Property in Barbados?

  3. Overview of the Buying Process

  4. Key Property Taxes in Barbados

    • Property Transfer Tax

    • Stamp Duty

    • Value Added Tax (VAT)

    • Annual Land Tax

  5. Legal and Regulatory Requirements

    • Role of Attorneys

    • Exchange Control Requirements

    • Registration at the Land Registry

    • Property Valuation Rules

  6. Special Tax Considerations for Foreign Buyers

  7. Financing Options and Mortgage Rules

  8. Holding Property as a Corporation or Trust

  9. Ongoing Property Costs and Taxes

  10. Selling Property in Barbados: Exit Taxes and Procedures

  11. Comparison with Other Caribbean Destinations

  12. Expert Tips to Avoid Legal and Tax Pitfalls

  13. Conclusion

Introduction

Barbados has long attracted international property buyers with its white-sand beaches, political stability, and favorable tax regime. Whether you're considering a beachfront villa in St. James or a countryside retreat in St. George, understanding the taxes and legal regulations that govern property ownership is essential to making a sound investment.

Can Foreigners Buy Property in Barbados?

Yes. Barbados allows full property ownership by non-residents. There are no restrictions on foreign nationals buying residential or commercial property. However, all funds brought into Barbados for property purchases must be registered with the Central Bank of Barbados.

Important facts:

  • No citizenship or residency is required to buy.

  • Title to land is freehold in most cases.

  • Land and property purchases must go through licensed attorneys.

Overview of the Buying Process

Buying property in Barbados typically follows these steps:

  1. Find a property and make an offer through a registered real estate agent.

  2. Hire a local attorney to draft or review the Sale & Purchase Agreement.

  3. Pay a 10% deposit upon signing the agreement.

  4. Your attorney conducts a title search and due diligence.

  5. Final balance is paid, and transfer documents are executed.

  6. Property is registered at the Barbados Land Registry.

Timeline: The entire process can take 8–12 weeks.

Key Property Taxes in Barbados

Understanding the taxes applied when buying and holding property is crucial for budgeting.

Property Transfer Tax

  • Rate: 2.5% of the property value (paid by the seller)

  • Applies to real estate valued over BBD $150,000

  • Buyer is not typically responsible unless otherwise negotiated

Stamp Duty

  • Rate: 1% (also paid by the seller)

  • Based on the higher of the sale price or government-assessed value

🔍 Buyers should confirm who pays what in the Sale Agreement, as terms may vary.

Value Added Tax (VAT)

  • Not applicable on resale property.

  • VAT (17.5%) may apply to new builds or commercial properties, particularly those sold by developers.

Annual Land Tax

  • Applies to all properties.

  • Based on assessed site value and has a sliding scale:

    • 0% on first BBD $150,000

    • 0.1% up to $450,000

    • 0.7% up to $850,000

    • 1% on any value above that

  • Capped at BBD $60,000 for residential properties

Legal and Regulatory Requirements

Role of Attorneys

  • All property transactions require legal representation.

  • Attorneys conduct due diligence, land title verification, and finalize the conveyance.

  • Legal fees range from 1% to 2.5% of the property value plus 17.5% VAT.

Exchange Control

  • Foreign buyers must register their foreign funds with the Central Bank of Barbados.

  • This guarantees the ability to repatriate proceeds from future sale.

Land Registry

  • All transfers must be recorded at the Land Registry Department.

  • Recording fee: approximately BBD $10 per document.

Property Valuation

  • A government valuation may be required for tax purposes.

  • Private valuations are common for negotiation and financing.

Special Tax Considerations for Foreign Buyers

  • Non-residents are not subject to capital gains tax on the sale of property.

  • Income from rental property is taxable and must be declared to the Barbados Revenue Authority.

  • Double Taxation Treaties (DTTs) apply, including with Canada, the UK, and the U.S.

💡 Always consult a tax advisor to avoid double taxation in your home country.

Financing Options and Mortgage Rules

Foreigners can obtain mortgages from local banks, but with conditions:

  • Down payment: usually 30–40%

  • Interest rates: 5%–8% (subject to credit history and residency)

  • Mortgage terms: up to 15–20 years

  • Must provide proof of income, tax filings, and foreign bank references

Holding Property as a Corporation or Trust

Some investors choose to buy through:

IBC (International Business Company)

  • May offer privacy or estate planning benefits.

  • Must be incorporated under the Companies Act of Barbados.

Offshore Trust

  • Used for succession and asset protection.

  • Legal and tax complexity requires expert advice.

Note: Legal structure has implications for inheritance, tax, and sale.

Ongoing Property Costs and Taxes

  • Annual Land Tax as detailed earlier

  • Homeowners Insurance (BBD $2,000–$4,000 per year typical)

  • Property Management Fees: 10%–20% of rental income

  • Utilities: Generally higher than North America, especially water and electricity

Selling Property in Barbados: Exit Taxes and Procedures

  • Transfer tax and stamp duty again apply, but usually paid by seller

  • No capital gains tax on profit

  • Attorney’s fees on sale: same range (1–2.5% + VAT)

  • Buyers from countries with DTTs may benefit from tax relief on remitted gains

Comparison with Other Caribbean Destinations

Feature Barbados St. Lucia Bahamas Cayman Islands
Foreign Ownership Allowed Allowed Allowed Allowed
Capital Gains Tax None None None None
Stamp Duty 1% (seller) 2%–6% 2.5%–10% 7.5% (buyer)
Land Tax Yes (sliding) Yes Yes No
Exchange Control Yes No No No

Barbados remains attractive for stable governance, strong legal protections, and a well-established property market.

Expert Tips to Avoid Legal and Tax Pitfalls

  1. Always hire a local attorney experienced in real estate.

  2. Ensure foreign currency is registered with the Central Bank.

  3. Double-check the land title and any encumbrances.

  4. Clarify in writing who pays which taxes and fees.

  5. Use a qualified tax advisor if you plan to rent or sell.

Conclusion

Barbados offers a highly attractive environment for property buyers, combining tropical beauty with strong legal protections and a relatively straightforward tax system. Whether you're buying a vacation home or a long-term investment, understanding the local taxes and regulations will help you make smarter, more secure decisions.

With proper planning and expert guidance, owning property in Barbados can be both personally rewarding and financially sound.

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