Cayman Islands

Buying a home in The Cayman Islands By Allegra Hamilton

Background and history

Discovered in 1503 by Christopher Columbus on his fourth and last voyage to the new world, The Cayman are a collection of three coral islands in the western Caribbean sea: Grand Cayman, Cayman Brac and Little Cayman. Situated about 480 miles south of Miami and 180 miles northwest of Jamaica, their closest neighbour is Cuba, 150 miles north. The story says that Columbus reported sighting two small islands so full of tortoises (turtles) that they looked like rocks and he gave the islands the name Las Tortugas (The Turtles). Over the next 150 years, the islands went through several name changes and played host to passing ships, as sailors would use the islands to replenish their supplies of fresh water, turtle meat and various wild fowls. The name Cayman was derived from the Carib word for the Crocodile family – Caymanas – and several visiting buccaneers, including Sir Francis Drake, noted “large lizards” and crocodiles on these islands during the 1500’s to 1700’s.

Coming under British control when Jamaica was captured from the Spanish by Oliver Cromwell’s army in 1655, the Caymans finally became a British territory in 1670. Records show that the smaller islands of Cayman Brac and Little Cayman were settled first but did not last long as the settlers often fell prey to Spanish pirates. Once privateering officially came to an end in the early 18th century, settlers returned and their descendants still reside there. Annexed to Jamaica until they declared Independence in 1962, The Caymans opted to remain under British rule and are now one of the last non self-governing territories, with the Queen being represented by a Governor.

The two sister islands of Cayman Brac (14 sq miles) and Little Cayman (10 sq miles) have recently seen interest in developments with the Brac being established as a prime area for tourism and resort residential prospects. The primary aim for Little Cayman is for selective, small-scale tourism and related services development combined with a high measure of natural conservation in keeping with the island’s sensitive and unique environmental characteristics. 

Economy & Tourism

Once known for an economy built around turtling (hence their tourism icon), The Cayman Islands are now famously known as one of the largest tax havens in the world. For many years they have enjoyed a thriving economy with almost zero unemployment, pegging the local currency (the Cayman Islands Dollar) to the US Dollar at a rate of KYD1 = 1.227 USD. The primary source of income is through indirect taxation – an import duty of 20% is levied against imported goods, with few exemptions such as books, cameras & baby formula; there is also a flat licensing fee to financial institutions that operate in the islands, as well as a small fee charged to each tourist that arrives. The financial industry is well regulated with strict financial supervision and co-operation with US authorities reinforcing the Cayman’s international status for extensive financial services. The competitive offshore business facilities, coupled with beautiful surroundings on one of the safest islands in the Caribbean with political stability, accessibility of transportation, excellent communication and the highest per capita income in the Caribbean makes The Cayman Islands one of the most attractive in the region.

Tourism continues to boom with increases in both long and short stay visitors year upon year – one of the most popular beaches in the world, Seven Mile, is where you will find many of the finest hotels and condos.

Services on both Grand Cayman and Cayman Brac include electricity, the latest in telecommunications facilities - including a digital telephone exchange, telex, facsimile and cellular service - asphalt roads, hospital, schools, port and an airport, upgraded to international standards in 1988. Little Cayman remains relatively undeveloped, with a permanent population of less than 200 .

Real Estate Options

The Cayman Islands real estate market offers the serious investor many great opportunities and a number of reasons why: one of the main factors that truly sets Cayman apart from most other Caribbean islands is that there are no direct taxes - no income, capital gains, property or inheritance tax. Foreign ownership is not restricted and the Government runs a modern land registration system. Stamp duty of between 1.5 – 5% is payable on transfers of land and mortgage deeds and there are a variety of land zone types, so protect yourself by having a licensed land surveyor check the property boundaries and prepare a report.

Real estate prices in the Cayman Islands continue to increase each year, but some compelling bargains can still to be found, if you know where to look. The best course of action is to contact a local real estate agent who will have the knowledge of the local market, which will be essential to make an informed buying decision. Prices are lower on the other smaller islands than in Grand Cayman and investors or developers can still find a surprising amount of prime oceanfront or beachfront land for sale ideally suited for retirement getaways or for those just looking for a more relaxed lifestyle. For those seeking to build their dream Caribbean home, it is essential to engage a reputable architect who can guide you as to the ins and outs of building requirements as well as government incentives put in place to encourage development of the smaller islands. Whether undeveloped land or an existing property is involved, the price will, of course, depend on a variety of factors, including the location and size - there are many reputable international real estate companies, as well as local independent realtors and the real estate market is quite competitive. Should retiring to the Caymans be part of the reason for purchasing, many real estate companies offer a complete package of relocation services that can ease the process from beginning to end. In general, inland lots of a quarter to half an acre range in price from $10,000 to $55,000 while waterfront lots, which can be either coastal or on one of the many canal front quays, range from $750 to $2,250 per foot. For boating enthusiasts, 188 Magellan Quay is a modern four bedroom home with pool on just over a 1/2 acre within a quiet, residential area with views of Governor Point, 200ft of water frontage and a forty-foot fully serviced dock. Beachfront lots are in the range of $1,000/$3,500 per foot depending on the area - Knight Frank International are offering the Palacades, luxury villas at the very exclusive Prospect Point, a rare opportunity to purchase a tri-level, 3 bedroom villa (there are only four) located in the south west of Grand Cayman with 330 ft of beach in an environmentally protected zone for $1,575,000. Land zoned for hotel/tourism use on Seven Mile Beach, now in limited availability, can cost $20,000 per foot or more, while similar land away from this prime beach area is in the $1,500 to $4,000 range. 

For more information:

www.caymanislands.ky - Cayman Islands Tourist Board We recommend you obtain a copy of the Turks & Caicos Real Estate Magazine and speak with local residents – you will be looking for someone with a solid background in the community, extensive client base and a wide portfolio of listings.

Prices

Finally, what should you realistically expect to pay:

Building your own home

While price is largely dependent on area, and view, you can expect to pay a minimum of U $75,000 an acre for a decent lot on Provo – the better the view, the higher the price. Ocean front land, when you can find it, is commanding a minimum of US$600,000 per acre with at most 150’ frontage, without a beach …

for actual beach front you would be looking at the Long Bay Beach at US$1M and up for 150’ of frontage with 2 acres – or better yet, look to the sister islands; the further afield, the better the price. If the ultimate goal is to build your dream home on the lot, current construction prices hover around US$150.00 per square foot on Provo, a little higher on the sister islands, and considerably more on any of the Cays. If an existing residence makes. most sense to you, you will find that asking prices are upward of US$350,000 … and I do mean upward! The fact is; houses in the U $300,000 - US$400,000 range are in the highest demand, and are rarely on the market for more than 2-3 weeks. If this is to be a winter home, you may want to consider a duplex or property with a guest house – the second accommodation will afford an annual income, and provide a presence in your absence.

Condo-Hotels

Condo-Hotels offer the owner an income producing, low maintenance vacation retreat in one of the world’s fastest growing tourism destinations. Our condo developments provide every conceivable comfort, and come in every size – from studio suites to 4 & 5 bedroom penthouses and on yet, to developments that include family size ocean front villas. In this scenario, the complex has a professional management and rental team. The management provides maintenance for buildings, suites, amenities and grounds – guaranteeing a first- class facility to be enjoyed by owners and visitors alike.

Assuming the owners place their condos in the rental pool, the rental team and front desk book the suites on a rotating basis. There is a strata (condo) fee associated with every condo development. In addition, if the owner elects to place the unit in the rental program, the rental management fee is a percentage of the rental revenue. There are several new developments in the pre-construction stage – a purchase at this point offers significant savings, a phased purchase schedule, and may offer the opportunity to ‘personalize your suite’.

Legal and tax issues

To address any concerns in regard to real estate dealings: the Turks and Caicos Islands are a British Crown Colony, clear title is provided and protected by the Crown and all real estate transactions are based on a Registered Land System. The Land Registry, located in Grand Turk, ensures a legal land transfer process and provides a central system where deals of ownership, title, mortgages and other interest in property must be recorded in a public register. It is worthwhile to note that as an incentive to encourage inward investment, Government charges a lower rate of Stamp Duty on transfers of property on some of the less developed islands. For the bargain hunter, lower property prices on Grand Turk, Salt Cay, South Caicos, Middle and North Caicos, coupled with lower Stamp Duty represents a significant saving. Weather We’ve got the sun all year round! The ‘winter’ months (for the northern climes) are as sweet and refreshing here, as spring (79-84 deg.)

When it’s spring and fall in the higher latitudes, we experience a short-lived rainy season (82-86 deg.), and summer is hot, hot, hot, (86-100 deg.) tempered by the cool airs carried across the Atlantic by the Trade Winds. Currency

Our proximity to the United States makes them our natural Trading Post and our lifeline to terra firma. Therefore, our currency is the U.S. Dollar. We have several international banks that handle currency exchange and provide access to ATM machines; all our hotels, dining facilities, water sports operators and most of the stores accept credit cards.

How to get here:

American Airlines are our principle carrier, well versed in how to find us and offering several flights daily. International and Charter flights from New York, Boston, Charlotte, Atlanta, Toronto and Montreal arrive all week long; British Airways makes a turn around from London every Sunday. Providenciales has a well-equipped International Airport (PLS), and is on every Travel Agent’s ‘must see’ list. Just ask any of them … we’d love to see you here …

Further information

www.turksandcaicosrealty.com

http://www.tcimall.com – Primary website for Turks and Caicos Islands information

http://www.wherewhenhow.com – Acclaimed Turks and Caicos Visitors Guide

http://www.tcrea.com – Turks and Caicos Real Estate Multiple Listing website info@McLeansLaw.com – Enquiries on TCI legal technicalities

tci.tourismpls@tciway.tc – Turks and Caicos Tourism Office – for information package