Tips For Reducing The Stamp Duty In The Cayman Islands

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When you are purchasing property in the Cayman Islands, you might discover that there is a large tax on many of the transactions that involve the transfer of real estate titles. This can be problematic because stamp duty is a 7.5% tax on any property. 7.5% on a property that is worth hundreds of thousands of dollars can be a huge fee and make the property that you were originally considering to be out of your price range. Here are some tips for keeping the amount of money you have to pay on stamp duties as low as possible.

1. Make the Most of Being a First Time Buyer if You Are a Resident

If this is your first time buying property in the Cayman Islands, then you are going to be exempt from having to pay the stamp duty up to CI$300,000. It is absolutely critical that you make the most out of this exemption in order to reduce the amount of money that you are going to have to spend in the future. If you were planning on slowly acquiring more and more land in the Cayman Islands over time in order to build a series of businesses or a resort, you are going to want to reconsider this plan. Instead, you are going to want to purchase as much as possible under CI$300,000 in one transaction so that you get the most out of the exemption.

If you are purchasing land that has not been developed, the limit for the exemption is CI$100,000 and you have to sign a document swearing that you will develop it yourself.

These exemptions do not apply to those who do not live in the Cayman Islands.  

2. Become a Resident

If you don't live in the Cayman Islands and are not eligible for the stamp duty exemption, then you might want to consider becoming a resident of the Cayman Islands by living there for the requisite amount of time and filling out all of the paperwork to make it official. This process might take an extended amount of time, but it will give you an opportunity to watch the property market and stake out the best possible claim for your needs more thoroughly.

3. Work Through Someone Else

Finally, if you have family on the Cayman Islands, you might be able to get them to purchase the land for you so that you do not have to pay the stamp duty. You will need to trust this family member implicitly because your name will not be on the deed to the land. This is a good step to take if you want to start your business in the Cayman Islands immediately but don't want to pay the stamp duty. You can take the time to become a resident, build your business, and then have the ownership of the property transferred to you once you are a citizen.

For more information, talk to a real estate agent that specializes in selling property in the Cayman Islands.