How To Buy Property Overseas: Our Belize Guide
Belize is a small country, but it has an amazing range of property options on offer… stunning Caribbean islands, beaches on the mainland in Corozal, Toledo, and Stann Creek districts, nature-rich riverfront homes, and farms, jungles, and cooler mountain properties, too.
Aside from figuring out where in this country you want to buy property, you should also understand the buying procedures in Belize… and the potential pitfalls.
Today I am introducing you to the property purchase process in Belize.
Private Developments Vs. Local Living
Some people want the familiarity, convenience, and community of a residential subdivision like Carmelita Gardens in the Cayo district. Others find the idea of living in a planned community claustrophobic.
I’m of mixed opinion. To have rules forced upon me at home when I’m not breaking any law goes against my feeling that my home is my castle. However, there are few zoning laws in Belize. Who’s to say that my neighbor won’t open a nightclub or mechanics garage in their yard tomorrow?
Buying property in a planned expat community nearly always costs more than buying in the local community, and it usually has annual HOA fees attached. It also provides a sense of community, security, and intentional living.
Belize villages are less expensive, but they are noisy. Even in the quietest local villages, music and the sound of construction can get loud…
House Lot Vs. Acreage
Outside of towns, it’s hard to find lots smaller than 1/4 of an acre (1,000 square meters), though some older lots can be as small as 1/8 of an acre (500 square meters).
In towns, these lots can often be picked up starting at US$7,500 (for less desirable ones) and outside towns starting at US$3,500. The cheapest lots will probably have few or no services or proper roads in place.
In and around larger towns like San Ignacio, lots can still be found in town for about US$20,000 or starting outside towns for US$5,000 if you can handle bad or no real access roads.
There is a growing desire among expats moving to Belize to live a more self-sufficient and resilient lifestyle…
Small acreages (3 to 10 acres) can cost the same as a single lot in a subdivision. They’re usually a little further from town and might need utilities brought to them.
Nature Reserves
Approximately 40% of Belize’s landmass is a protected nature reserve.
In the past, politicians sold land inside nature reserves… often without telling the new buyers about the environmental restrictions attached to them, which can make the cost of construction prohibitive.
This is one reason you always need to conduct a full title search.
Crown Reserves (Queen’s Land)
The 66 feet of land closest to any major body of water in Belize is designated as “Queen’s Land.”
It’s public and does not belong to you, even if it’s right in front of your house. Anyone can walk on it, though they can’t legally walk over your property to get there.
It’s illegal to build permanent structures on Queen’s Land, but you can use it non-exclusively for your own purposes.
Road Reserves
Belize road reserves are often legally much wider than the narrow paved section you see and drive on.
Just because your wall is 10 feet from the edge of the road doesn’t mean your fence or wall (or house) isn’t on public property.
This happened to my neighbor a few years back… He didn’t survey the actual boundaries before he bought. He assumed that the fence lines he saw were the legal property lines.
When the road was widened to its legal maximum, he lost concrete walls, old trees, pump houses, and acres of land he thought he owned.
This issue is less likely in a planned community as the survey will be more recent and the developer will know the boundaries.
If in doubt, get a licensed surveyor to find the concrete boundary markers on the property or replace them if they are missing.
Maya Ruins
Belize is littered with ancient Maya ruins and unexcavated temples. Many small hills around the countryside are actually earth-covered Maya monuments.
A major find while digging foundations could delay your build until the department takes the time to inspect your dig, as happened to me once.
Be aware that it’s illegal to keep artifacts you find during construction without notifying the Department of Archaeology.
Scams
While it’s becoming less common, land scams still exist in Belize. Foolhardy investors can and will lose their investment if they don’t do their due diligence and find a reputable lawyer or land consultant.
These are the most common scams:
- “Foreigners can’t own land.” This one has been doing the rounds since before I arrived in Belize and has never been true. I can’t tell you the number of ex-British soldiers that I met that had been convinced to put their property in some local chancer’s name because they were told they couldn’t hold title themselves.
- Using an old title certificate as proof of title. Also, taking a title certificate as proof that someone owns a particular property. The problem here is that you can get titles transferred without handing in the old title. This leaves the old owner with his old title, and if they are unscrupulous, they can try to sell the property to someone foolish enough not to do a full title search with the Land Department.
- Off-plan selling. This one is more commonly perpetrated by expats upon expats. A developer convinces an expat to buy an unbuilt condo off-plan. The developer has no experience or underestimates the difficulty of developing in another country and can’t complete the job successfully. The investor then loses their investment. Only buy off-plan from established developers with good track records.
Taxes
Unless you live in a high-end area of Belize City, San Pedro, or Placencia, property taxes are inexpensive.
Most of my friends who don’t live in a town pay less than US$15 per year for property tax. The government tax on the transfer of land is 8% after the first US$10,000. There is no capital gains or inheritance tax in Belize.
Of course, the services you receive for these taxes are commensurate with what you pay…
Property Title
Common Law is the legal system in Belize, so solid title is available. Property can be held in your own name or through a foreign or local company or trust. No restrictions are posed on foreigners for owning land in Belize.
Two Main Categories of Land Exist in Belize…
Undeclared Land
The oldest form of title in Belize is a Deed of Conveyance and deals with undeclared land.
Doing a full title search on undeclared land is more time consuming than searching registered land, as many of the unregistered land records are not computerized.
All lands in Belize will eventually be converted to registered land.
Ownership by conveyance can be converted to a certificate of title by an application for first registration of title.
Transfers of undeclared land in Belize must be recorded at the Titles Registry in Belmopan.
Land held by conveyance is still a full title, but title defects are harder to identify, as are property boundaries, which makes your title-searcher’s job more critical.
Declared Land
The more modern, better-defined, and surer way of holding title in Belize is through a certificate of title. A certificate of title pertains to registered land, which is properly surveyed and its Land Department records are computerized.
Transactions done for declared lands are registered at the Land Registry.
The Title Transfer Process
- The first step in the transfer process is the purchase and sale contract. This agreement is not strictly needed for a transfer to take place, but it is recommended, and the Valuations Department likes to see it.
- Title search. Your lawyer hires a land consultant (private land researcher) to go to Belmopan and search the archives and computer records. This is done to ensure that the title is good, the seller is the actual owner, and no liens or encumbrances are attached to the title. It also finds out if property tax arrears exist.This important step is skipped at your peril. You don’t necessarily need to hire a lawyer to conduct a title transfer for you, as a lawyer will hire a land consultant to do the search. However, land consultants are unregulated, and there is no professional body to report them to if there are issues. Lawyers charge at least 1.5% of the sale price plus additional costs to affect a transfer.I’ve personally handled the transfer of titles for many clients, but there are many rules for filling out the application forms that are difficult for a Belize novice to handle, unless you get assistance directly from the Land Department.
- Once the title search is clear, you can make a down payment or a full payment. The payment is made, often but not always through a lawyer’s escrow account, and the transfer is signed and submitted to the Land Department in Belmopan with your estimated stamp duty payment.
- You will get a receipt of submission of the title transfer instrument, which you can use to check the status of your title transfer by calling the Land Department and giving them the LTU number on the receipt. Traditionally, everyone understates the value of the property to minimize the stamp duty burden. If the Valuations Department thinks that your contract of sale is intentionally undervaluing the property, it will assess additional stamp duty levies on the transfer.
- Three to 12 months later, your title will be produced by the Land Department.
- Title insurance is not necessary but available.
The application for title transfer is usually accompanied by the following:
- The original land title;
- Contract of sale, showing the amount being paid;
- Discharge of mortgage or charge, if applicable;
- Proof that all land taxes have been paid;
- Recording or registration fees and stamp duty;
- Any covenants that you might want to attach to your title;
- Stamp duty payment as per the contract value of the sale;
- Notarized copy of your passport (both front inner pages) and recent utility bill;
- Notification to the central bank of a foreigner buying land.
Note: Unregistered land and conveyances require complicated legal drafting to effect transfer, which you won’t be able to do yourself. Seek out the services of a reputable lawyer.
Financing Options
Most U.S. banks won’t accept foreign physical assets as collateral for financing. If you don’t have the full cash price of your overseas dream home, you have a few options.
Mortgages are available in Belize through local and offshore banks.
Until recently you could only hope for a 70% LTV from Belizean banks, with the best interest rates being 7% to 9 %. These loans were generally only for 15 years with a balloon payment or refinance option at year 15.
Heritage International Bank recently has been offering up to 90% financing at 6% over 20 years. This is the lowest rate I’ve ever seen in Belize.
This loan-to-value ratio doesn’t include the cost of stamp duty, lawyer’s fees, or other costs. You should add at least another 10% to the nominal LTV rate to account for these extra expenses.
Your age can be a hurdle when applying for a foreign mortgage. Belizean banks either don’t offer loans to people over 70 or require life insurance to cover your mortgage repayments in case of your death. Such insurance can become expensive.
The Cost Of Buying Property In Belize
Certain basic minimum costs must be met by both parties when it comes to property transfers in Belize.
Lawyers charge 1.5% to 2% of the total purchase price. Land consultants charge about US$250 to US$500 to handle the transfer. Realtors will charge the seller 6% to 10% of the sale price to sell the land.
Stamp duty is 8% after the first US$10,000 and is paid by the buyer. Other costs include recording fees (US$7.5) and property taxes.Con MurphyEditor, Overseas Property Alert