Introduction
Being a commonwealth member country, Belize's legal system is
similar to that of the English system. In general, foreigners may
acquire Belizean properties although certain restrictions are
imposed.
Belize has three property registration systems - Deeds
Registration, Private Conveyancing and Torrens System. Which system
is to be used depends on the location of the subject property.
Therefore, buyers are suggested to consult experienced local
conveyancing lawyer to give appropriate conveyancing advice and
carry out the property acquisition procedure accordingly.
Belize is widely recognised as a tax haven, benefiting from zero
capital gains tax and inheritance tax. However, property buyers
need to be aware that Belize is not a tax free country. Therefore,
buyers are suggested to understand the tax implications before
acquiring properties in Belize.
Legal Guide
LAW
The legal system of Belize is based initially on the English
common law. Parliament is responsible for the law making process
and the country's judicial system is comprised of:
- The Supreme Court
- The Court of Appeal
- The Privy Council in the UK
In respect of the real estate sector, following are some of the
relevant laws:
- Constitution
- Towns Property Tax Act and Subsidiary Act
- Unlawful Possession of Property Act
- Property Protection (Fire) Act
- Married Women's Property Act
- Aliens Landholding Act
- Law of Property Act
- Lost and Abandoned Property Act
- Land Tax Act and subsidiary Act
- Belize Land Development Authority Act
- Land Acquisition (Promoters) Act
- Land Acquisition (Public Purposes) Act
- Land Adjudication Act and Subsidiary Act
- Land Reform (Security of Tenure) Act
- Land Surveyors Act and Subsidiary Act
- Land Utilization Act and Subsidiary Act
- Landlord and Tenant Act and Subsidiary Act
- National Lands Act and Subsidiary Act
- Registered Land Act and Subsidiary Act
OWNERSHIP & RIGHTS
In general, foreign non-residents may acquire properties in
Belize. Both freehold (i.e. fee simple) and leasehold
properties are available in Belize. However it is noted that
Belize's Alien Landholding Act imposes certain restrictions for
foreigners to acquire property in Belize. According to the Act
(revised edition 2000), "aliens" are defined as a person or a
company other than:
- A Belizean citizen or a citizen of a Commonwealth Country;
or
- A person domiciled in Belize and who has been so domiciled for
an uninterrupted period of over three years;
- A company incorporated in Belize and deemed not to be under
alien control
The Act stipulates that unless a license is granted, "aliens"
may only acquire land and title "if the same is situate within the
boundaries of a city or town and the total area held does not in
the aggregate exceed one-half acre or if the same is situate
outside the boundaries of a city or town and the total area held by
any alien does not in the aggregate exceed ten acres".1
BUYING PROCEDURE
In general, property buying procedure in Belize is as
follows:
Reserve the property
Once you have chosen
your ideal property, a reservation agreement is to be signed with
the seller and a reservation deposit needs to be paid (will form
part of the purchase price).
Due Diligence
Before signing the
preliminary purchase contract (off-plan property) or property sale
and purchase contract, it is important that to carry out a due
diligence check on the seller as well as the subject property. The
due diligence checklist may include:
- the company registration certificate (if the seller is an
entity) or proof of seller's identity (if the seller is a private
individual)
- proof of a personal who is duly authorised to sign all legal
documents (if the seller is an entity or an attorney of the
seller)
- the title certificate for the land
- the planning permission/consent (off-plan property)
- the building licence (off-plan property)
- all other relevant permissions for the commencement of the
project (off-plan property)
- any lien, debt, development finance, or encumbrances against
the land and/or the project
- at least one of bank guarantee, insurance and/or assurance
ensure the completion of the project or an escrow system to provide
security for the buyer's property payments (off-plan property)
- an independent quantity surveying (QS) system during the
construction period (off-plan property)
The above due diligence check is more appropriate to be done by
a local law firm or conveyancing lawyer.
Exchange Contract
Before singing
preliminary purchase contract (off-plan property) or property sale
and purchase contract, buyers are suggested to consult a local law
firm or conveyancing lawyer on analyse the risk, any unfavourable
terms of the contract. Upon signing of the contract, first
instalment/payment is often required.
Singing The Title Deed
There are three
different real property title systems in Belize and which system is
to be used depends on where your property is located:
Deeds Registration (not yet available everywhere in Belize) –
when application for transfer is made, a new Land Certificate is
issued to the purchaser. The owner holds a Certificate of Title,
and this, together with the relevant Land Register entries is the
proof of ownership.
Private Conveyancing – involves the transfer of land by conveyance
and registration. In order to assure that the seller actually owns
the land, a title search must be made in the Lands Unit in Belmopan
to unearth the chain of title and to uncover any encumbrances such
as mortgages.
Torrens system – which involves a First Certificate of Title
followed by Transfer Certificates of Title. Under this system, the
charges or encumbrances and the transfers from the title are shown
on the relevant Certificate, so no further search is normally
needed before the new Transfer Certificate of Title is issued,
following the application for transfer. Unlike the Torrens system
in other countries, the Belize system is not backed up by title
guarantee.
Taxation (for non-residents individuals)
TAXATION WHEN ACQUIRING/PURCHASING PROPERTY
| category |
tax/fee rate |
payable time |
| Stamp Duty |
5% if the price more than US$10,000 |
upon registration of the title |
| General Sales Tax (GST) |
10% |
upon registration of the title |
| Registration Fee |
US$7.5 |
upon registration of the title |
| New Title Fee |
US$7.5 |
upon registration of the title |
| Central Bank Approval |
US$50 |
upon registration of the title |
| Inspection of record |
US$50 |
upon registration of the title |
TAXATION WHEN OWNING/HOLDING PROPERTY
| category |
tax/fee rate |
scope/remark |
| Business Tax on rental income |
3% |
|
| Property tax (on actual rented out dwelling) |
normally 2%, although some urban areas can be up to
9% |
Levied on actual rental income of the dwelling (if it is
rented out) or on the assessed rental values. |
| Property Tax (on under developed land) |
the amounts vary between municipalities. In some urban
areas this is 1% |
Charged on underdeveloped land and paid annually in
April. |
TAXATION WHEN SELLING/DISPOSING PROPERTY
| category |
tax/fee rate |
scope/remark |
| Capital Gains Tax (CGT) |
NIL |
|
| Inheritance Tax |
NIL |
|
| Stamp Duty |
5% if the price more than US$10,000 |
This is collected from the new buyer and payable upon
registration of the new title. |
NB: Belize has signed double taxation agreement with a number of
countries. For more information on UK and Belize double taxation
agreement, please refer to HM Revenue & Customs' webpage:
http://www.hmrc.gov.uk/manuals/dtmanual/DT3500+.htm
1. Attorney General's Ministry
(http://www.belizelaw.org)
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