After reading our recent why to buy in the BVI blog, we hope you are convinced that the BVI is indeed the ideal investment choice!  Falling in love is exciting, but it seldom pays to be all heart and no head, especially where investment of any kind is concerned. Let’s take a look at the practical side of the process.

Step 1: Find the Right Real Estate Advisor / Broker

Chemistry is key. Whether you are a first-time buyer or seasoned investor, the realtor you choose and the relationship you build will set the tone and pace for your entire experience. This is the person that is going to be by your side for all the feels – the thrill of the search, the excitement of the find, the questions, the concerns, the decisions, the wait, and finally the closing celebrations. You don’t want someone, you want honesty, integrity, and knowledge – someone who really listens, who mitigates risk, and has your best interests at heart. Do your research, reach out to references and other homeowners if possible, and take your time. Your realtor is your matchmaker. Partner with someone who is going to make thoughtful and considered introductions, as well as few wild cards, to ensure all bases are explored and lead to a happily ever after.

Step 2: Explore the islands and the communities

The BVI is a small place, but no two neighbourhoods are the same. Your appointed realtor will guide you through the pros and cons of each location, but it’s important to be clear on your priorities from the start. Is your ideal Caribbean home a secluded retreat from the world or a property that will rent well and appeal to a wide range of vacationers? Is the home exposed to the elements, what does that look like in terms of maintenance and management, does the location benefit from breezes in the summer, where is the sun rising and setting… there is much to consider but your chosen realtor is there to talk and walk you through all the variables.

Step 3: Finding the one and saying “I do”.

You’ve fallen in love and you’re ready to commit.  Enter the Letter of Intent – the equivalent of getting down on one knee, with a few more terms and conditions included, although also nonbinding. The Letter of Intent is essentially an offer letter outlining the primary terms of the sale and stating that both the buyer and the seller agree with these terms.  The Letter of Intent is subject to contract, meaning that until the Sale and Purchase Agreement (SPA) has been signed, there is no legal commitment by either party but you are acting in good faith.

Step 4: Appointing a BVI Lawyer

The approval process for expat ownership of a BVI property can appear complex as it involves specific reporting requirements to the Ministry of Natural Resources. It is therefore important to have knowledgeable legal representation to guide you through the process. As one of the most prominent financial centers in the world, the BVI has no shortage of excellent legal firms from which to choose. Your realtor will recommend a specific firm or individual that they regularly work with and trust as well as others so you can find the right fit for you.  As an investor you might also be interested in forming a BVI company in which to purchase property, and your legal representative will assist with the incorporation. Don’t be overwhelmed. The process can be time consuming, but your real estate and legal team will do the work for you.

Step 5: Right of First Refusal

In the BVI, sellers selling to foreign buyers are required to advertise their property on a government portal and a local newspaper, either print or online, for four consecutive weeks. This is done to demonstrate to the BVI Government that no BVI citizen (Belonger) has an  interest in purchasing the property. Sellers typically advertise in the Classifieds section of the BVI Beacon, the local Tortola-based newspaper that publishes weekly print and daily online editions.

Step. 6: Make your Deposit

In most cases, a 10% deposit is required by the seller, paid to, and held by the seller’s realtor. This deposit becomes non-refundable once the Sales and Purchase Agreement (SPA) is signed although this is returned if the buyer is refused a Land Holders License – an event that is highly unlikely unless the buyer has a criminal background.

Step. 7: Is this really the one?

Before you commit legally and financially to the purchase you will have a period of time to carry out our due diligence, this is usually 30 days from the date on the signed letter of intent.  During this time you should secure an engineer’s report and any other assessments to confirm the structural and operational integrity.

Step 8: Sales and Purchase Agreement (SPA)

The SPA is a legally binding document prepared by the seller’s lawyers and submitted to the buyer’s lawyers for revision and/or approval.  Once the SPA has been signed, the buyer is legally committed to buy and the seller to sell at the stated price, subject to the agreed conditions. If for some reason the buyer is unable to pay the balance of the purchase price at completion, the buyer forfeits their deposit.

Step 9: Land Holding Licence

Foreign buyers – “non-Belongers” – require a Land Holders License to purchase and hold property in the BVI – one license per property that is owned, prepared, and submitted by your BVI attorney. (Side note: A BVI “Belonger” is a person of BVI ancestry or one who has otherwise been granted Belonger status by the BVI Government.) If you are purchasing a completed home, you will be granted a licence for that specific property with stipulations (enforced by penalties) not to undertake any alterations to the footprint without approvals from the BVI government.  If you are purchasing an undeveloped piece of land, the licence will detail your development plans for that piece of land. The BVI government requires owners to build within a defined period of time otherwise a penalty is applied.  The penalties and when they are applied are currently under review and we will cover this off in more detail in a future blog.

Step 10: Completion, Stamp Duty and Registration

Once the BVI Governor and BVI Government have approved and granted your Land Holder Licence you’re on the home stretch. Next stop: completion. This is usually scheduled to take place within a specific time after all the conditions in the SPA have been realized. Upon completion, the seller and the buyer sign an Instrument of Transfer. This records the handover of the property from the seller to the buyer.

All BVI buyers are required to pay a Stamp Duty to the BVI Government. This is calculated as a percentage of the higher of the purchase price and market value of the property. For non- Belongers, this is 12%; for Belongers, it is 4%. Immediately after completion, the buyer’s lawyers will present the Instrument of Transfer to Inland Revenue for payment of this Stamp Duty. Once paid and the Transfer stamped, the buyer’s lawyer will submit the Transfer for registration at the Land Registry. 

Thankfully neither the buyer nor the seller is required to be physically present in the BVI during any stage in the purchase process. Which brings us back to the true importance of building your acquisition team with thought and care. The BVI is home to beautiful properties, some fabulous real estate professionals (mainly yours truly) and outstanding legal experts ready to guide you through. Do your homework and take your time.  Happily ever after awaits.