Is Real Estate in the Caribbean a Good Investment?

Surrounded by the Caribbean sea, the Caribbean region comprises charming islands, picturesque coasts, a welcoming population, a growing economy, and a thriving real estate market. Since the Caribbean region is a tourist-driven market, it attracts foreign investors to buy real estate as property prices are constantly increasing.

With growing demand, individuals with properties in this area can always rent out their properties  or look into their selling options in order to yield future income. Moreover, in comparison to other European countries, property prices here are relatively lower, so if you are planning to buy luxury villas in Caribbean countries and make foreign investments in the Caribbean real estate market, then go for it! In this article, we will help you understand that real estate in the Caribbean is a good investment.

Real Estate in Caribbean Islands

Real-estate-in-the-Caribbean

Investing in the Caribbean real estate market can help you obtain a second passport through the various citizenship programs available in the Caribbean region. With a Caribbean passport, you can visit more than 140 countries with limited travel restrictions and apply for long-term visas to the United States and Canada. 

Being tax-friendly, the Caribbean region also levies significantly less to no taxes, helping you conserve your assets. The requirements for foreign investors vary from one investment program to the other and depend on the country you choose and the profitability of its real estate market.

Buying property in the Caribbean

Buying-property-in-the-Caribbean

Real estate investment in the Caribbean comes with many benefits. If you want to experience year-round sunshine, charming beaches, exclusive beach clubs, resorts and villas, and a fantastic beach lifestyle, then the Caribbean islands should be on top of your list. In this section, we will take you through real estate in the Caribbean islands.

 

Real Estate investments in the Caribbean under Citizenship Programs

real-estate-investment-under-CBI

Country Amount Invested Period of Ownership
Antigua and Barbuda $200,000+ 5 years
Grenada $220,000+ 5 years
Dominica $200,000+ 3 years
St Kitts and Nevis $400,000+ 5 years
$200,000+ 7 years
Saint Lucia $300,00+ 5 years

 

Rental income in the Caribbean

rental-income-in-the-Caribbean

Most foreign investors invest in the Caribbean real estate market to rent out their property rather than staying at the place permanently or making it their holiday home. Therefore it is essential to determine your rental income before investing in your desired property in the Caribbean. 

Since the Caribbean has a thriving tourism market throughout the year, the rental income is stable for almost the entire year. Although there are seasons where the rentals are high and in others low, in most cases, the difference in cost is lower than 1.5 times, hence it is negligible.

Annual rental income in the Caribbean

Country Profitability
Antigua and Barbuda 4%
Grenada 4.3%
Dominica  4-5%
St Kitts 5.11%
Saint Lucia 3.57%

 

The approximate price for renting an apartment or villa in a hotel compound approved under the Citizenship By Investment Program is costlier – $1,500 -$2,500/week. If you are an investor, your rental yield annually will account for around 3-5%.

Approximate cost of renting a three-bedroom flat in the Caribbean

As per Numbeo, these are the average costs of renting a three-bedroom flat on the Caribbean island.

 

District Rent Per Month
Antigua and Barbuda $4,200
Grenada $2,900
Dominica $2,303
St Kitts and Nevis $4,300
Saint Lucia $2,267

 

Choosing property in the Caribbean – Things You Should Know

Choosing-Property-in-the-Caribbean

Flats with two-three bedrooms are primarily purchased in the Caribbean with the objective of renting them out. Even if you can’t purchase a single property alone, you can always buy real estate in joint ownership. Instead of a property, you can also purchase a building plot or yacht dock. But make sure to purchase government-approved real estate projects.

Why are approved projects more profitable?

  • The fact that it is approved under the Citizenship by Investment program makes it reliable. If you invest in an approved project, you will be protected from fraud.
  • Since the approved projects are mostly five-star properties, the rooms are never vacant, which means income all year round.
  • All approved projects are situated in good locations, generally near a local tourist spot, therefore attracting tourists throughout the year.
  • Around 8 out of 10 approved projects are close to shopping malls, highways, and hotels. The convenience of these locations drives tourists.
  • Approved projects employ only big international companies for construction purposes; hence the projects go into operation very quickly, and there are no chances of getting duped.
  • If you make early investments in the project during the construction phase, there are more chances for the projects to get executed early.
  • As a private investor and co-owner of the approved project, you can spend around 7-14 days a year in the villa or the hotel free of cost.
  • Since the management company is responsible for all expenses of maintenance of your property and puts it for rent, it is easier for foreign investors because they don’t have to get into daily problems.

What are the restrictions in purchasing and reselling investment property?

Caribbean-real-estate-for-purchasing-and-buying

Several countries in the Caribbean limit property purchase depending on the type of property. For instance, in Dominica, you won’t be able to buy a plot of land for building a house according to your customization. As per the Citizenship Program of Antigua and Barbuda, you can sell your licensed property only twice.

If you are at the selection stage of purchasing your property, it is critical to check the property’s clean title. You can talk to a professional lawyer about this. The service charge will be around 1-3% of the selected object. If you cannot visit the Caribbean due to your busy schedule, you can also choose your object remotely. If you are planning to invest in a property developed by a big developer, you can ask the firm to organize a video conference for you to select the property.

Real estate investment in Antigua and Barbuda

If you are looking to invest in real estate, earn a profit, and obtain second citizenship in return, then investing in Antigua and Barbuda real estate can be your perfect choice. In addition to a beautiful landscape, the country offers attractive real estate investment opportunities and a powerful passport.

Benefits of real estate investment in Antigua and Barbuda

  • The property prices in the country are stable
  • The country offers various property types for investment – from apartments to beach-facing private villas.
  • Being a tax-friendly nation, the country has no income tax, capital gains tax, wealth tax, or inheritance tax.
  • By making a real estate investment in the country, you can move a step forward to obtain second citizenship for yourself and your family members.
  • You get to enjoy a slow-paced beach lifestyle and stay in a safe and secure environment.

Citizenship by Investment Program in Antigua and Barbuda

One of the easiest ways to buy property in Antigua and Barbuda is through its Citizenship by Investment Program. Through this route, you need to buy shares or units of property in pre-approved real estate developments, valued at a minimum of $200,000. Interested applicants must note that the property purchased must be maintained for a minimum period of five years. Before buying a property in this country, the applicants must also keep in mind that they must purchase a property that is present under the government’s approved real estate project list.

Real estate prices in Antigua and Barbuda

If you are planning to buy a home in Antigua and Barbuda, the real estate prices will range between $255,000 – $12,000,000. But this will ultimately depend on the type of property you choose and the money you are ready to invest. For instance, you need to pay around $250,000 for an excellent one-bedroom apartment. On the other hand, a 22-acre private island will cost you around $1,500,000. If you are looking for a two-bedroomed villa in the North Finger of Jolly Harbour, it will cost you in the region of $265,000. If you are planning to buy a 12-bedroom commercial building in St John’s, it will cost you around $395,000.

Real estate investment in Grenada

Renowned for its white sand beaches, exotic wildlife, waterfalls, and attractive investment opportunities, Grenada is one of the best Caribbean islands where you can live, invest and work remotely. If you are planning to buy real estate on the Spice island of the Caribbean, then this section will help you understand the real estate scenario in Grenada in detail.

Benefits of real estate investment in Grenada

  • The country is safe for you to live in with your family.
  • Grenada offers various properties from which you can choose to buy.
  • You can obtain citizenship through real estate investment in Grenada.
  • You can live a relaxed beach lifestyle on a beautiful Caribbean island.
  • Grenada is a tax-friendly nation.
  • Owing to its strategic location, the country is well connected to other parts of the world.

Citizenship by Investment Program in Grenada

To obtain citizenship through the real estate route, applicants must make a minimum investment  of $220,000 in shares of pre-approved real estate, usually high-end tourism accommodation. Through the Grenada Citizenship by Investment Program, you can obtain a Grenada passport that allows you to travel visa-free to more than 140 countries, including popular destinations like the UK, the EU Schengen countries, China, Russia, and Singapore.

Real estate prices in Grenada

The real estate prices in Grenada depend significantly on the type of property that you choose and the location that it is situated in. The average sale of property in Grenada varies from $160,000 to $7,000,000. From luxurious villas, spacious bungalows, and charming family houses to modern apartments, you will get all types of properties in Grenada. Please note that after you buy the property and obtain your sales agreement, you must pay all required taxes and fees.

Real estate investment in St Kitts and Nevis

The island country of St Kitts and Nevis is located in the Caribbean region and is the world’s smallest sovereign federation. The island nation is home to white sandy beaches, beautiful natural landscapes, holiday homes, luxury resorts, and villas. By buying real estate in St Kitts and Nevis through the country’s Citizenship by Investment Program, you can get hold of a passport of the country.

Benefits of real estate investment in St Kitts and Nevis

  • You can enjoy the relaxed beach lifestyle of the Caribbean.
  • Owing to the airport’s connection, St Kitts and Nevis is well connected to other parts of the world.
  • You can obtain St Kitts and Nevis citizenship by purchasing approved real estate in the country.
  • There are different types of properties available in the island country.
  • You can obtain a St Kitts and Nevis passport for yourself and your family within two months.
  • You can buy property in St Kitts and Nevis through single or joint ownership.
  • St Kitts and Nevis is a tax-friendly nation. The country has no income tax, inheritance tax, or gift tax.

Real estate prices in St Kitts and Nevis

If you are planning to obtain citizenship in St Kitts and Nevis, you need to make a minimum investment of at least $400,000. If you are investing jointly, then you need to make a minimum investment of at least $200,000. It is estimated that around 70% of transactions that happen within the real estate sector are undertaken within the Citizenship by Investment Program.

Currently, there are around 80 approved properties from which you can purchase in St Kitts and Nevis. Note that you have to keep the property under your ownership for a minimum period of five years. After that, you can sell it to any potential investor looking to obtain the country’s passport.

In case you don’t want to invest through the Citizenship by Investment route, you can buy real estate at any price. But please keep in mind that you will need to put in an application for the Alien Landholding License, which is around 10% of your property valuation.

If you are planning to purchase a two-bedroom apartment in the capital city of Basseterre, it will cost you around $ 600,000. A luxurious villa, on the other hand, will cost you around $ 1.5 to 2 million. Be ready to shell out $ 4-5 million if you are planning on buying a super luxurious home with a swimming pool view.

Real estate investment in Dominica

Famous for its natural hot springs, tropical rainforests, botanical gardens, and welcoming population, this island country in the Caribbean also has an emerging real estate market. Dominica has one of the lowest investment requirements under its Citizenship by Investment Program, which makes real estate in Dominica very attractive and profitable.

Benefits of real estate investment in Dominica

In comparison to other Caribbean islands, property prices in Dominica are much lower.

  • You can include your family members in your Dominica passport application.
  • The island is closely connected to the United States.
  • Dominica offers beautiful surroundings and an excellent lifestyle for its citizens.
  • The cost of living in Dominica is low.
  • The island enjoys excellent weather throughout the year.
  • You can obtain Dominica’s passport within 3-4 months of your application.
  • The country levies no wealth, gift, inheritance, property, or capital gains taxes.

Real estate prices in Dominica

If you are planning to buy your dream home in Dominica through the Dominica Citizenship by Investment Program, you need to make a minimum investment of $200,000. Since the tourism sector is not as developed as the other Caribbean nations, it’s cheaper to buy properties in Dominica. When you are investing in Dominica real estate, make sure that you do so from government-approved projects. As of now, there are ten approved projects in Dominica and they include Bois Cotlette, Jungle Bay Villas, Cabrits Resort Kempinski, Secret Bay Residences, The Silver Bay Development, and Tranquility Beach Dominica. 

Although Dominica offers attractive real estate investments under their Citizenship by Investment Program, it is observed that 80% of investors apply for citizenship through the donation route. This is due to various factors like developing tourism infrastructure, poor connectivity to the USA and Great Britain, and the island is also prone to natural disasters. But steadily, the country is developing its tourism industry and, in the process, is making its real estate market more profitable.

Real estate investment in St Lucia

Renowned for its turquoise waters, raw beauty, relaxed beach lifestyle, and flourishing real estate market, St Lucia offers its citizens an excellent standard of living and the perfect environment to live, invest and work. Whether buying a holiday home, investment property, or apartment, St Lucia is one of the best Caribbean real estate investments.

Benefits of real estate investment in St Lucia

  • St Lucia has one of the lowest costs of living
  • St Lucia real estate sales are very profitable
  • St Lucia is a tax-friendly nation and offers various tax exemptions.
  • You can obtain a St Lucia passport through the St Lucia Citizenship by Investment Program.
  • The island is well-connected to other parts of the world through various routes.

Real estate prices in St Lucia

Property prices in St Lucia vary from the type and size of property you buy and the location of your real estate purchase. If you are planning to buy a local house, it will cost you around $200,000, and your cost will go up depending on the location and real estate type. If you are thinking of buying more modern real estate, like condos and bungalows, it will cost you around $300,000, and villas facing the beach will sell for around $1,000,000.

Purchasing a pre-approved government property will cost you around $300,000 and more. But these properties mainly include luxury hotels and resorts or boutique properties. Buying real estate in St Lucia is pretty simple and profitable, especially for foreign buyers, as they can later resale or charge rental. In addition to this, real estate (residential property) is taxed at 0.25%. The country taxes commercial property at 0.4%.

 

Real Estate Investments in the Caribbean under Citizenship Programs

real-estate-investment-in-Caribbean-islands

Country Amount Invested Period of Ownership
Antigua and Barbuda $200,000+ 5 years
Grenada $220,000+ 5 years
Dominica $200,000+ 3 years
St Kitts and Nevis $400,000+ 5 years
$200,000+ 7 years
Saint Lucia $300,00+ 5 years

 

Rental Income in the Caribbean

rental-income-in-the-Caribbean

Most foreign investors invest in the Caribbean real estate market in order to rent out their property rather than staying at the place permanently or making it their holiday home. Therefore it is essential to determine your rental income before investing in your desired property in the Caribbean. 

Since the Caribbean has a thriving tourism market throughout the year, the rental income is stable for almost the entire year. Although there are seasons where the rentals are high and in others low, in most cases, the difference in cost is lower than 1.5 times, hence it is negligible.

Annual Rental Income in the Caribbean

 

Country Profitability
Antigua and Barbuda 4%
Grenada 4.3%
Dominica  4-5%
St Kitts 5.11%
Saint Lucia 3.57%

 

The approximate price for renting an apartment or villa in a hotel compound that is approved under the Citizenship By Investment Program is costlier – $1,500 -$2,500/week. If you are an investor, your rental yield annually will account for around 3-5%.

Approximate Cost of Renting a Three-bedroom Flat in the Caribbean

As per Numbeo, these are the average costs of renting a three-bedroom flat on the Caribbean island.

 

District Rent Per Month
Antigua and Barbuda $4,200
Grenada $2,900
Dominica $2,303
St Kitts and Nevis $4,300
Saint Lucia $2,267

 

Choosing Property in the Caribbean – Things You Should Know

Choose-Property-in-Caribbean

Flats with two-three bedrooms are primarily purchased in the Caribbean with the objective of renting them out. Even if you can’t purchase a single property alone, you can always buy real estate in joint ownership. Instead of a property, you can also purchase a building plot or yacht dock. But make sure to purchase government-approved real estate projects.

Why are approved projects more profitable?

  • The fact that it is approved under the Citizenship by Investment program makes it reliable. If you invest in an approved project, you will be protected from fraud.
  • Since the approved projects are mostly five-star properties, the rooms are never vacant, which means income all year round.
  • All approved projects are situated in good locations, generally near a local tourist spot, therefore attracting tourists throughout the year.
  • Around 8 out of 10 approved projects are situated close to shopping malls, highways, and hotels. The convenience of these locations drives tourists.
  • Approved projects employ only big international companies for construction purposes; hence the projects go into operation very quickly, and there are no chances of getting duped.
  • If you make early investments in the project during the construction phase, there are more chances for the projects to get executed early.
  • As a private investor and co-owner of the approved project, you can spend around 7-14 days a year in the villa or the hotel free of cost.
  • Since the management company is responsible for all expenses of maintenance of your property and puts it for rent, it is easier for foreign investors because they don’t have to get into daily problems.

What are the restrictions in purchasing and reselling investment property?

Caribbean-real-estate-for-purchasing-and-buying

Several countries in the Caribbean limit the purchase of property depending on the type of property. For instance, in Dominica, you won’t be able to buy a plot of land for building a house according to your customization. As per the Citizenship Program of Antigua and Barbuda, you can sell your licensed property only twice.

If you are at the selection stage of purchasing your property, it is critical to check the property’s clean title. You can talk to a professional lawyer about this. The service charge will be around 1-3% of the selected object. If you cannot visit the Caribbean due to your busy schedule, you can also select your object remotely. If you are planning to invest in a property developed by a big developer, you can ask the firm to organize a video conference for you to select the property.

What is the process of purchasing real estate in the Caribbean?

Real-estate-purchase-process

If you are applying for Citizenship by Investment: 

  1. Select your property – Look at the list of pre-approved real estate developments and choose the best option. 

 

  1. Reserve your property – Once you’ve selected the property, settle your agreement, paying around 10-15% of the total price into an escrow account. 

 

  1. Apply for citizenship – Submit all your documentation, including the purchase agreement, to the Citizenship by Investment Committee of the country you are applying to. 

 

  1. Receive approval and complete the purchase – After two to six months, once your application is approved, you will receive an approval letter. You can then complete the purchase and send the documentation. 

 

  1. Receive citizenship – You will receive the citizenship certificate, and after that, your passport will be delivered through a delivery service to your preferred address.

 

If you are not applying for Citizenship by Investment: 

  1. Choose the property – Once you select your property, settle your agreement for securing the property by transferring 10-15% of the total amount. The property will be taken off the market. 

 

  1. Get a license – If you are an investor not from the Caribbean countries, apply for an Alien Landholding License (ALHL, which is the land ownership license). It costs 10% of the price of the property. 

 

  1. Complete the purchase – Transfer the amount to the developer’s account. It takes around a week to complete the entire process. You can sign all contracts in person in the presence of a notary or remotely through a lawyer with power of attorney.

 

  1. Register the property – Register your property with the local land department.

 

Other Expenses when Buying Real Estate

Other-Expenses-while-buying-real-estate

In addition to buying real estate, a foreign investor has to buy an AHL License that amounts to 5-10% of the transaction amount. The investor should also take into account the license processing time. For example, it takes around six months to get your license processed in Antigua and Barbuda.

Moreover, the foreign investor also has to pay taxes and fees to the agency. Please keep in mind that if your real estate is bought for citizenship, then in some cases, you might have to pay special government fees.

The investor also needs to pay a commission of around 3-6% of the entire transaction amount. Therefore, it is always more cost-effective to purchase property directly from the developer. You don’t have to bear this expense if you are purchasing the property through the Citizenship Program. 

Fees and Taxes when Buying Real Estate

 

Country ALHL cost Stamp Duty Other Taxes Citizenship Program Fees
Antigua and Barbuda 5% 2.5% None $30,000
Grenada 10% 1% 10% transfer tax for properties over $7,500 $50,000
Dominica 10% 4% 3.5% $25,000
St Kitts and Nevis 10% None 0.2% $35,000
Saint Lucia $2,300-$4,200 depending area of the site 2% None $50,000

 

Maintenance Costs of Property in the Caribbean

Maintenance-of-property-in-Caribbean

Taxes in the Caribbean – The tax for property in the Caribbean ranges from 0.002-5%. St Kitts levies the least amount of taxes on the property. The land tax is calculated on the basis of a progressive scale in the Caribbean. But if you are paying tax for a residential property, it is relatively low. Real estate owners in Dominica have to pay a council tax of around 1.25% of the cadastral value of their property.

Utility bills in the Caribbean – In Grenada, the cost of utilities like water, internet, electricity, and telephone are the lowest and start from $83. Whereas in St Kitts and Nevis, the utility costs amount to $200-$260, which is the highest in the Caribbean. In Antigua and Barbuda, the cost of utilities comes to around $150-$250. The estimated costs are for apartments that are between 60-80 sq.m.

Real estate insurance – The insurance of real estate in the Caribbean amounts to 0.2% of the value of the property.

Service cost of the management company – The service cost completely depends on the type of property. For example, you need to pay a service cost of around 1-2% for villas and apartments that costs around $200,000.

If you are a buyer of shares of a resort or an applicant of the citizenship program, then you don’t need to pay direct maintenance costs of real estate. This is because the management company deducts the costs from the lease payments made by the investor.

Renting out Property in the Caribbean

Renting-out-property-in-the-Caribbean

The real estate that is bought by investors through the citizenship by investment program can be rented out as soon as the property is operational. A management company manages the entire process.

Generally, the private investor and the developer share the rental income equally. The share of the investor is mentioned in the contract alongside the management company. The rental income is generally 3-5% yearly.

The tax regime on rental income is different for tax residents in the Caribbean. A non-resident gets a tax ID to pay taxes. If you have a Caribbean state ID, it will help you to invest in business in the Caribbean. 

Income tax rate – Lessor

 

Country Tax resident For Non-residents
Antigua and Barbuda None 20%
Grenada None 10-30%
Dominica None Upto 35%
St Kitts and Nevis None 10% (if you are withdrawing funds from income earned abroad)
Saint Lucia None 10%-30%

 

Caribbean Real Estate Prices – Associated Costs

Associated-costs

When you are buying property in the Caribbean through a Citizenship by Investment Program, there is a certain mandatory ownership period which is around 3-7 years.

Term of real estate ownership under Citizenship Programs

 

Country  Minimum Term
Antigua and Barbuda 5 years
Grenada 5 years
Dominica 3 years
St Kitts and Nevis 5 years
Saint Lucia 5 years

 

Tax and fees of a sale

The seller of the real estate in the Caribbean needs to pay a stamp duty that is a certain amount of the value of the property. But you need to keep in mind that stamp duty changes from country to country. For instance, the tax rate for international investors is much higher than for residents in Grenada and Saint Lucia.

Stamp Duty for Those Selling Property

Country For a Tax Resident For a non-resident
Antigua and Barbuda 7.5% 7.5%
Grenada 5% 15%
Dominica 2.5% 2.5%
St Kitts and Nevis 5-18.5% depends on the property value and location 5-18.5% depends on the property value and location
Saint Lucia 0-5% 10%

 

Frequently Asked Questions

Which is the cheapest Caribbean real estate market?

You can find affordable properties across the entire Caribbean region. You can find cheap real estate to buy or rent in Antigua and Barbuda, Grenada, Dominica and Saint Lucia among others.

Is real estate in the Caribbean islands a good investment?

If you are planning to invest in real estate in a tropical country with a welcoming population and affordable real estate options, then the countries across the Caribbean are the best options. 

How is the Caribbean real estate market?

The Caribbean region has a thriving real estate market. Since the region attracts tourists from all over the world, investing in Caribbean real estate is always profitable.

 

Is owning rental property in the Caribbean profitable?

Since the Caribbean region witnesses tourist footfall all year around, it is a good option to invest in real estate in the Caribbean and then rent it out for profit.