Buying a piece of paradise
Real estate shopping in JamaicaWednesday, June 05, 2019
TRANSFER tax and stamp duty rates have been slashed, the economy is celebrating consecutive quarters of growth and new development orders have given the green light for developers to build more multi-storey buildings; the stars of the real estate market are all seemingly aligned.
Mortgage rates are low and incentives to build are high!
Jamaica offers a suite of fiscal incentives to investors, and has no restrictions on the foreign ownership of real estate. Whether you are an investor looking to get into the Jamaican market or a member of the Diaspora plotting your return home, there are abundant opportunities in the Jamaican real estate market, which, with the right tools, you can capitalise and cash in on. Here are some key considerations when looking to buy real estate in Jamaica.
1. Identify a property suitable for your desired use
If you are purchasing from overseas, it's crucial to work with a reputable, qualified professional that you can trust. This may be done through a local agent, such as a real estate dealer or salesman. Real estate dealers and salesmen are licensed under the Real Estate (Dealers & Developers) Act of Jamaica to conduct real estate business which includes marketing real estate for sale and assisting purchasers in identifying property for purchase.
2. Conduct Due diligence on the property
Due diligence includes legal due diligence, environmental due diligence and may be conducted before entering into the Agreement for Sale or after entering into the Agreement and prior to closing the sale. Who is the owner of the property? Is the property registered under the Registration of Titles Act? What is the size of the land? Where are the boundaries of the land? Are there restrictive covenants on the title to the property that you need to be mindful of? What use is the land zoned for? Is the land environmentally sensitive? Due diligence can be facilitated through an attorney or real estate dealer or salesman. Good due diligence should include a Surveyor's Identification Report, a valuation, an environmental report and a title search.
3. Obtain a taxpayer registration number (TRN).
A TRN can be obtained through the Tax Administration of Jamaica (TAJ) and must be obtained before an individual or entity may own land in Jamaica.
4. Consider how you would like to own the land
Would you like to have the property registered in your name, or owned by a holding company? Speak with your attorney to determine what option is best for you. For example, if the purchasing entity is an overseas company, the company should be registered as an overseas company doing business in Jamaica under the Companies Act of Jamaica for it to own land in Jamaica.
5. Engage the services of an attorney-at-law
You should engage an attorney-at-law to represent you in the purchase of the property. It is not advisable to purchase property in Jamaica without legal representation. Important things to consider when choosing an attorney-at-law are their practice areas and level of experience. You should ensure your attorney-at-law is listed as an attorney who has been issued with a Practising Certificate by the General Legal Council (GLC).
6. Present an offer to purchase the property
An offer to purchase may be presented to the vendor of a property through an attorney-at-law or a real estate dealer or salesman. An offer may also be made by the purchaser directly to the vendor. An offer should outline the terms and conditions on which the property is going to be purchased including the offer price, the time for completion of the sale transaction, whether the financing for the transaction will be cash or mortgage, whether the property is being purchased vacant or occupied, and other important details.
7. Enter into an agreement for the purchase of the property
An agreement for sale will typically be prepared by the vendor's attorney-at-law for negotiation between the parties. The agreement for sale will need to be signed by both parties to the agreement. The purchaser generally pays the deposit on the signing of the agreement.
8. Payment of closing costs.
Closing costs associated with the purchase of land will include government taxes and duties such as stamp duty and registration fees on the transfer as well as professional fees including attorney fees, valuation fees, surveyor fees and environmental consultant fees.
On completion of the purchase, and in some cases before completion, the purchaser will be let into possession of the property. At this time the purchaser will transfer the property tax and utility bills into its name and will become responsible for these outgoings and the property as the person in possession.
By following these steps with the guidance of reputable and experienced professionals, property shopping in paradise can be a profitable and pleasurable experience.
Gabrielle Grant is an Associate at Myers, Fletcher & Gordon in the Property Department. She may be reached at firstname.lastname@example.org or at myersfletcher.com. This article is for information purposes only and does not constitute legal advice.