Creative Ways to Finance Belize Real Estate

Financing Belize Real Estate

Belize real estate is a desirable commodity for both expats (people relocating to Belize) and investors. Belize real estate financing is not the same as many are used to in the USA or Canada.

Belize has become increasingly popular for its residency programs. It is a top relocation and retirement destination. Many people look at Belize and Belize real estate for personal use and lifestyle. That said, Belize also appeals to potential property owners and investors. What makes Belize real estate so desirable is more than just the climate. In Belize, foreigners purchasing land or property are afforded the same rights as Belize citizens regarding property ownership. Belize is also a tax haven and low-tax jurisdiction, as property taxes are low, and there are no capital gains or inheritance taxes in Belize.

Even though Belize recognizes full-foreign ownership and grants fee-simple title to foreigners (foreigners have the same ownership rights as locals), it can be challenging for a foreigner to finance a property traditionally in Belize. For offshore owners or investors, Belize does not have standard mortgages or bank financing like you are used to in the US or Canada. Most people buying real estate in Belize have to do a cash sale transaction.

The appeal and advantages of Belize property ownership are undeniable – for lifestyle/personal use or investment. Short of purchasing Belize real estate with cash, what financing options do potential property owners or investors have?

Obtaining local conventional bank financing or a standard mortgage can be challenging for a non-resident in Belize to finance real estate.

However, for non-residents (foreigners), there are creative ways to finance property in Belize. Below, you can see some Belize real estate financing options to consider:

  1. Owner Financing
  2. Offshore Financing
  3. Co-Investing

 

Owner Financing

Owner or Vendor Financing is the easiest way to finance real estate in Belize. Vendor (owner) financing is a convenient and popular form of real estate financing in Belize. Vendor financing or owner financing (aka seller-carried), is when the seller offers owner financing to the buyer of the property offered for sale.

If you are looking for something with vendor financing, you will be happy to know it is an easy process. It is generally a nonrecourse loan with the seller/vendor carrying the note on the property (similar to how a bank carries the note on a home mortgage in the US). You take full control of the property when all parties sign the agreement and the down payment is made.

The terms vary with the seller; typically, the down payment would be a minimum of around 25% down. The seller-finance loan agreement is filed along with transfer and deed forms with the lands department in Belize to protect both buyers and sellers. The title transfer is completed once the final payment has been made and the terms of the financing agreement have been met.

 

Offshore Financing

Some offshore banks or international banks offer mortgage loans or financing to non-residents or foreigners looking to purchase fee-simple property in Belize. These off-shore banks can provide financing options for individuals and International Business Companies (IBCs).

The terms can range from 5-30 years. Down payment requirements are higher than what many are used to in domestic markets, as most offshore banks lend at a maximum of 60% LTV (Loan to Value). The down payment requirement is often at least 50% down. One of the big advantages of offshore lending over domestic lending is that you can choose the currency of your loan. This facilitates transactions conducted in U.S. dollars (since real estate in Belize is typically in USD) and facilitates acquisitions by Americans.

 

Co-Investing

Buying a home with a co-investor means you share your property’s equity with the investor from the start. Put simply: They’ll share in the profits if your home increases in value and the loss if it does the opposite. Also, share the revenue/passive income.

Investing in a private Belize company that acquires investment properties through pooling funds or local or offshore secured financing is another way to acquire real estate in Belize without having to deal with the headaches and paperwork of obtaining financing on your own.

Whether through pooling funds with other investors or providing the capital for the investment, co-investing is an easy and efficient way to acquire real estate in Belize.

 

Options for Belize Real Estate Financing

As mentioned above, financing in Belize is more complex than in domestic markets. We do not have the same standard mortgages and bank financing people are used to in the USA or Canada. Most real estate transactions in Belize are cash sales.

You can get a mortgage or loan in Belize from the banks. The bank will charge a high interest rate and require a larger down payment. Because of the conservative nature and banking policies in Belize, the banks are still at a stage where the interest rates are higher than off-shore purchasers are used to. Most banks in the US will not loan to an out-of-country real estate purchase. There are, however, real estate opportunities in Belize with seller or vendor financing. Due to the Belize real estate market conditions, most owners and investors go the route of owner/vendor financing.

Seller/vendor financing (if available) is straightforward. It is a non-recourse loan with the seller/vendor carrying the note on the property (similar to how a bank carries the note on a home mortgage in the US). You take complete control of the property when all parties sign the agreement, and the down payment is made.

There are three ways for purchasers to receive financing for Belize real estate:

  1. Local Belize Financing: Local banks in Belize do offer to finance land and/or property, though it is not easy (especially for foreigners). It is also important to note that the interest rates with Belize banks and terms for financing are usually higher than what people are used to at home. Local banks in Belize usually have much higher interest rates in the range of 10-18% interest with fixed terms of only 12 months. When you get financing from a local bank in Belize, the loan is closed every year and renewed at the new rate. When borrowing or lending from a local Belizean bank, it will be in Belize dollars, and most real estate transactions in Belize are in US dollars. Because most of the Belize real estate transactions take place with U.S. dollars, local financing is challenging. Local banks in Belize will also often only lend money to Belize residents or citizens.
  2. Offshore or Domestic Financing: If you are not a resident or citizen of Belize and are looking for financing, you can borrow U.S. dollars through an offshore bank. In Belize, Caye International Bank is one of the only off-shore banks in the country. Interest rates with international banks in Belize are still much higher than people are used to in their domestic markets and are around 12% to 18%, and most offshore banks, when lending to people who are not Belize residents or citizens, require a high degree of collateralization with a high down payment (often 50%). Some people do acquire domestic financing in their home country through a line of credit or refinancing their home/mortgage.
  3. Owner, Seller, or Vendor Financing: This is the most common way foreigners acquire financing for land in Belize. It is also far more common for someone to find land with financing than it is with a home or condo. Belize property owners and/or developers usually agree to property financing at better rates than the local banks. It is also very easy to qualify, as it is a non-recourse loan. The rates through seller or vendor financing are often less than what is available at local banks and financial institutions. Around Secret Beach, you are able to secure property with 20% down. Within Mahogany Bay, you can secure canal-front land with 25% down.

 

 

Using a Self-Directed IRA or 401K

One way to manage costs, minimize the out-of-pocket investment, and ease the burden of taxation is to purchase real estate under a Self-Directed IRA or 401K. These structures are very easy to do in Belize and allow Americans to purchase an off-shore investment property using investment funds. The benefits of ownership under these legal entities include; access to capital for investment, and less taxation on capital gains, thus earning greater profits from the Belize real estate investment.

Real estate investors (from the US) can hold investment real estate in an IRA or 401K to gain access to capital (without paying high taxation) and reduce the tax exposure (as long as the investment capital has not been distributed to the IRA owner).

Under the IRS’s self-directed IRA rules, contributions to Self-Directed IRA accounts can be used to purchase real estate (commercial, residential, or raw land) inside and outside the United States. This allows investors to use Self-Directed IRA funds or a 401K to invest in Belize real estate.

However, contributions to offshore real estate IRAs are subject to additional rules.  For example, while the property in your IRA can be rented to others, you can’t rent it out to your family. The property can also not be used for your own personal use (it has to remain strictly an investment).

Another advantage is that the rental income from an offshore Belize real estate investment through IRA is deferred and can be made tax-free if purchased using a ROTH IRA.  Under this setup, you could, in theory, collect decades’ worth of rental income and not pay US tax.  You only need to worry about taxes when you distribute the income from the property to yourself in the future.

 

Belize Real Estate Financing

Here are some general steps and considerations for financing real estate in Belize:

  1. Local Regulations and Laws:
    • Familiarize yourself with Belize’s real estate regulations and laws. It’s important to understand the legal framework for property ownership and financing in the country.
  2. Currency Exchange:
    • Belize uses the Belize Dollar (BZD) for general transactions, but US Dollars (USD) is commonly used for real estate.
  3. Local Lenders:
    • Research local banks and financial institutions in Belize that offer real estate financing. Some international banks may also have a presence in Belize.
  4. Mortgage Options:
    • Explore the types of mortgages available, including fixed-rate mortgages, variable-rate mortgages, and other financing options. Mortgage terms and interest rates may vary, so compare offerings from different lenders.
  5. Down Payment Requirements:
    • Understand the down payment requirements. In Belize, it’s common for lenders to require a substantial down payment, often ranging from 20% to 30% of the property value.
  6. Loan Eligibility:
    • Lenders will assess your eligibility based on factors such as income, credit history, and the property’s value. Be prepared to provide documentation to support your financial stability.
  7. Interest Rates:
    • Interest rates can vary, so compare rates from different lenders. It’s important to understand whether the interest rate is fixed or variable and how it may change over the life of the loan.
  8. Loan Terms:
    • Review the terms of the loan, including the repayment period. Some loans may have longer or shorter terms, and this can affect your monthly payments.
  9. Insurance Requirements:
    • Lenders may require you to purchase property insurance. Make sure you understand the insurance requirements and factor the cost into your overall budget.
  10. Legal Assistance:
    • Consider hiring a local attorney with experience in real estate transactions in Belize. They can help navigate the legal aspects of property acquisition and financing.
  11. Due Diligence:
    • Conduct thorough due diligence on the property you intend to purchase. This includes title searches, property surveys, and any potential legal or environmental issues.
  12. Closing Costs:
    • Be aware of closing costs, which may include legal fees, stamp duties, and other expenses. Factor these costs into your budget.

 

For more information on financing in Belize and Belize real estate opportunities with financing available, contact us at RE/MAX Belize.

 

 

Belize Investment Summit 2023

Dustin Rennie, John Lancet & Abil Castaneda Belize Investment Summit

Belize Investment Summit

Тhе Веlіzе Іnvеѕtmеnt Ѕummіt 2023, соnсludеd оn Ѕерtеmbеr 1, and wаѕ а lаndmаrk еvеnt thаt ѕhоwсаѕеd Веlіzе’ѕ investment роtеntіаl and opportunities for investment. Ѕреаrhеаdеd bу thе Оffісе оf thе Рrіmе Міnіѕtеr аnd thе Міnіѕtrу оf Fіnаnсе, Іnvеѕtmеnt, аnd Есоnоmіс Dеvеlорmеnt, thе ѕummіt wаѕ сеntеrеd оn thе thеmе, “Еndlеѕѕ Орроrtunіtіеѕ!”. Тhіѕ еvеnt еmрhаѕіzеd Веlіzе’ѕ drіvе tо аttrасt аnd рrоmоtе іnvеѕtmеnt fоr іtѕ есоnоmіс dеvеlорmеnt.

The Belize Investment Summit 2023 focused on attracting and promoting investment for economic development in Belize, identifying opportunities, and showcasing Belize’s readiness to support global investment.

The Prime Minister addressed the Summit, highlighting the government’s vision on enhanced and strategic investments and presentations from other high-profile international experts, policymakers, and enterprise movers and shakers who shape Belize’s investment climate. Dustin Rennie from RE/MAX Belize was included as one of the industry experts for real estate and development.

Тhіѕ ѕummіt showed and presented opportunities in Belize fоr bоth dоmеѕtіс аnd іntеrnаtіоnаl іnvеѕtоrѕ. Іt wаѕ а рlаtfоrm whеrе thе gоvеrnmеnt рrоudlу dіѕрlауеd Веlіzе’ѕ rеаdіnеѕѕ tо ѕuрроrt glоbаl іnvеѕtmеnt. Іn hіѕ аddrеѕѕ, Рrіmе Міnіѕtеr Јоhn Вrісеnо undеrѕсоrеd thе gоvеrnmеnt’ѕ vіѕіоn fоr ѕtrаtеgіс іnvеѕtmеntѕ, ѕеttіng thе tоnе fоr thе rеѕt оf thе еvеnt.

Тhrоughоut thе ѕummіt, аttеndееѕ bеnеfіtеd frоm іnѕіghtѕ ѕhаrеd bу іntеrnаtіоnаl ехреrtѕ, tор-tіеr рublіс оffісіаlѕ, Сhіеf Ехесutіvе Оffісеrѕ, аnd kеу роlісуmаkеrѕ. Тhеѕе ѕtаkеhоldеrѕ, whо соllесtіvеlу ѕhаре the іnvеѕtmеnt future of Belize. The summit featured a number of presentations and panels with а соmрrеhеnѕіvе оvеrvіеw оf thе орроrtunіtіеѕ аvаіlаblе іn Belize.

 

Belize Tourism Board

The Belize Tourism Board (BTB), as part of their initiative to drive Tourism Investment in Belize, hosted a series of panel discussions at the Belize Investment Summit. The panels highlighted development success stories in Belize’s current and future opportunities. The panels provided guidance for persons wishing to invest in Belize.

 

Dustin Rennie

Dustin Rennie was a Guest Panelist on the Investment and Real Estate Opportunities in Belize. Dustin contributed valuable insight into Belize’s real estate market, investment opportunities, and future development. On the panel, Dustin Rennie discussed real estate investment and setting up business in Belize and the requisite preparation in terms of a feasibility study to connect brands or investors with projects—review of Hotel Licensing Requirements and Accommodation taxes.

Panel Included:

  • Simone Bell | Investment and Innovation Specialist, Belize Tourism Board
  • Dustin Rennie | Regional Director RE/MAX Belize Belize
  • John Lancet | Senior Managing Director & Practice Leader South & Caribbean, HVS (link)
  • Abil Castaneda | Chief Tourism Officer, Ministry of Tourism & Diaspora Relations (link)

 

Dustin Rennie, John Lancet & Abil Castaneda Belize Investment Summit
Dustin Rennie, John Lancet & Abil Castaneda Belize Investment Summit

 

Dustin Rennie Belize Investment Summit
Dustin Rennie Belize Investment Summit

 

John Lancet & Dustin Rennie Belize Investment Summit
John Lancet & Dustin Rennie Belize Investment Summit

 

Simone Bell, Dustin Rennie Belize Investment Summit
Simone Bell, Dustin Rennie Belize Investment Summit

 

Abil Castaneda with Dustin Rennie, John Lancet & Simone Bell at Belize Investment Summit
Abil Castaneda with Dustin Rennie, John Lancet & Simone Bell at Belize Investment Summit

 

Abil Castaneda with Dustin Rennie, John Lancet & Simone Bell at Belize Investment Summit
Abil Castaneda with Dustin Rennie, John Lancet & Simone Bell at Belize Investment Summit

 

Dustin Rennie with RE/MAX Belize at the Belize Investment Summit 2023. The panel explored real estate investment and setting up business in Belize. Connecting brands and investors with projects. Dustin Rennie contributed valuable insight into Belize’s real estate market, investment opportunities, and development.

Dustin Rennie is the director of RE/MAX Belize. Dustin Rennie is a member of the RE/MAX Hall of Fame, earner of Career Achievements & Leadership, and recognized as one of the top real estate experts in the Caribbean & Central America region. Dustin Rennie won top commercial agent for RE/MAX Caribbean & Central America for 2022 and was among the top 100 global agents (residential & commercial).

Dustin has been a Diamond Award winner with RE/MAX in 2021 & 2022 and was recognized as one of the top producers.

 

The Belize Investment Summit 2023 focused on attracting and promoting investment for economic development in Belize, identifying opportunities, and showcasing Belize’s readiness to support global investment. This included Belize real estate investment.

Belize Real Estate Financing

Belize Real Estate Financing

Belize is a beautiful country with a lot to offer, including; tropical beaches, tax incentives, a favorable economy, and financial benefits like low-cost properties and tax-free buying for qualified retirees. When considering property in Belize, understanding your financing options may seem confusing and complicated. Thankfully, a few property financing options exist, even for non-residents.

In Belize, we do not have standard mortgages or bank financing that many investors and owners use in Canada or the US. Most real estate transactions in Belize are cash sales, but some opportunities with vendor financing are available. Even though Belize is primarily a cash sale market, there are several advantages when investing in an off-shore market that is not overly leveraged.

It is also important to note that Belize is a predominantly cash market; because of this, we don’t have overlending and real estate bubbles (which create more significant drops and volatility).

 

Advantages of Buying in a Cash Market

As mentioned, Belize is primarily a cash-sale transaction market. Even though investors do not have the same opportunities to leverage their investment, there are a number of advantages to investing in a cash sale market. There are many upsides when making a cash market real estate investment (like Belize). Some of the most notable include:

Diversification

  • Investing in an off-shore market, investors have wider access to innovative projects and more unique opportunities than traditionally in the public or domestic marketplace. Investors are able to look at stable cash flow from a vacation market with growing popularity. For example, a private real estate investor will see that the dynamics of buying and selling in a cash market significantly lower an asset’s volatility potential. Cash sale real estate markets are less susceptible to volatility as they do not have the bank foreclosures of more traditional economies.

Lower Volatility

  • Markets are known to be volatile (especially markets that are over-leveraged); it’s just the nature of an economy reliant on “borrowing money.” While cash market investments aren’t completely immune to recessions and economic fluctuations, the cash sale real estate sectors have less volatility and experience a faster recovery/smoothing out. When the global market is challenging, cash sale market investments minimize the volatility of an investment portfolio. Low-volatility, cash sale markets see less drastic declines in value when economies adjust.

Higher Return Potentials

  • In the investment industry, private markets outperform public ones due in part to the illiquidity risk premium, which is the return an investor requires for investing in something that can’t be quickly sold or exchanged for cash. This remains true in cash sale markets (like Belize). Property liquidity is more accessible as there will be less competition amongst a smaller buyer pool of qualified purchasers. In Belize, a property owned outright (cash) can be leveraged and offer seller/vendor financing, creating passive income and a higher ROI over time.

Unique Opportunities

  • In Belize, investors have access to various opportunities, from rental income-producing properties to appreciating locations, Caribbean beaches to lush jungles. Belize real estate (as it is at the early stages of development) opens the door to the lifecycle of an investment – from its inception through its growth. Investors also have access to rental management options and greater visibility and ability to forecast investment growth. Being a cash off-shore opportunity leads to greater influence and control over the investment/market.

Long-Term Focus

  • Public markets and real estate in the US or Canada have recently been focused on the short term. The short-term draw lead to low-interest rates, quick returns, etc. Belize as a cash investment is a long to mid-term investment strategy. The public market and real estate in the US tend to be more reactive, sometimes very dramatically, during an economic downtown. As an investor, say in Belize real estate, you have your eye on the future horizon and aren’t worried about these short-term fluctuations. One of the most important Warren Buffett quotes on investing that you can take in is, “If you aren’t willing to own a stock for 10 years, don’t even think about owning it for 10 minutes.”

Lower Risk

  • There is a certain amount of risk associated with an investment. People often view investing off-shore as high risk when there are far fewer risks in certain markets. Belize is a perfect example. In a cash market, you have less external risk. With any investment, there will be a risk; even though there is a risk, you can also mitigate the exposure. The cash market of Belize, with the string ownership rights and foreign investment incentives, has less risk, and investment is more protected. When economies turn, people no longer look for Return on Investment; they look for Return of Investment.

Associated Costs

  • Compared to more traditional real estate markets or domestic real estate (that has very high costs of ownership), Belize is very low. Property taxes in Belize are very little. You own land outright without the costs of upkeep and carrying costs. Even rental properties have lower operational costs in Belize.

 

Diversification from Interest & Inflation

American and Canadian real estate markets are known to be volatile – it’s just the nature of an economy reliant on “borrowing money.” Interest and inflation are prominent, uncontrollable dictators of property value in these markets – often leaving property owners vulnerable to unmanageable debt and property values decreasing. This makes these markets REACTIVE, which comes with risk.

Meanwhile, in unleveraged, cash markets like Belize – property values are much more simple, driven by supply and demand. There are rarely foreclosures or defaults since most property is owned outright, in cash. Investing in areas with limited land (scarcity), like islands, means that generally, as time passes and land becomes more limited, property values rise in correlation. This makes Belize much more of a PROACTIVE market – favoring savvy investors to secure their land early; at the current price.

No market is entirely immune to risks of recessions and economic fluctuations, but these days, interest and inflation are extremely high in the USA and Canada.

However, cash sale real estate markets have less volatility and experience a faster recovery/smoothing out.

This is why owning land in a stable, less volatile market like Belize is a great way to diversify with more secure, less volatile, and cash-owned property.

 

Stable & Less Volatile Appreciation

Every property that is sold equals one less lot you can buy. The most strategic investors look to own land in areas with high tourism demand and low supply – like Ambergris Caye Real Estate. This way, the growth next door and in your area steadily increases your property value while you hold your land or cash flow.

This is why most investors seek to own multiple properties – giving them the freedom to build on some and increase the equity value of their others, which they can flip in the future, tax strategically.

Mutually, private real estate investors will see that the dynamics of buying and selling in a cash market significantly lower an asset’s volatility potential. Cash sale real estate markets are less susceptible to volatility as they do not have the bank foreclosures of more traditional economies. This favors a long-term investment mentality – buy, hold, grow, cash-flow, flip.

Investing in an off-shore market like Belize allows investors to look at unique short-term cash flow from a booming emerging vacation market with growing popularity – while their property appreciates.

 

Financing Property in Belize

Belize has become a popular location and destination for retiring expats. Belize is a low tax jurisdiction with a warm Caribbean climate, English Speaking, and retirement incentive programs like QRP. For retirees, Belize makes immigration and relocation easy. English is the primary language, and Belize’s legal system is based on British Common Law. As a result, Belize has a stable, democratic government and a stable and dynamic economy with a strong tourism sector.

Belize also has a lot of draws and appeal to property owners and real estate investors. In Belize, foreigners purchasing Belize land or property in Belize are afforded the foreign owners/investors have the same property ownership rights as Belize citizens. Belize is also a low-tax jurisdiction; there are no capital gains or inheritance/estate taxes in Belize.

There are a lot of appeals to Belize real estate – for residency and investment. Even though financing is not as readily accessible in Belize as in other countries, there are financing options owners, and investors have.

Financing real estate for residency/lifestyle or investment in Belize can be challenging through local conventional bank financing (if you are not a Belizean citizen or resident). However, for non-residents, there are creative ways to get financing. Below you can see some creative options to finance real estate in Belize:

  1. Offshore Financing.
  2. Owner Financing.
  3. Co-Investing.

 

Advantages of Buying Property in Belize

Buying property in Belize can offer several advantages:

  1. Affordable Real Estate: Compared to many other Caribbean or Central American destinations, property prices in Belize can be relatively affordable. This makes it an attractive option for individuals looking to invest in a second home, retirement property, or vacation rental.
  2. Tax Benefits: Belize offers favorable tax benefits for property owners. There is no capital gains tax, inheritance tax, or property tax on undeveloped land. Property taxes on developed land are generally low, making it cost-effective to maintain ownership.
  3. English-Speaking Environment: English is the official language in Belize, which eliminates language barriers for those considering purchasing a property. This factor makes it easier to navigate legal processes, communicate with locals, and participate in the local economy.
  4. Political Stability: Belize has a long history of political stability and a democratic government. The country has a legal system based on English common law, providing a familiar framework for property ownership and the protection of individual rights.
  5. Natural Beauty and Ecotourism: Belize is renowned for its natural beauty, including pristine beaches, coral reefs, tropical rainforests, and ancient Mayan ruins. Owning property in Belize allows you to immerse yourself in these stunning landscapes and capitalize on the country’s growing ecotourism industry.
  6. Retirement and Second Home Destination: Belize is a popular retirement and second home destination due to its warm climate, relaxed lifestyle, and affordable cost of living. Owning property in Belize allows you to enjoy a laid-back Caribbean lifestyle, escape harsh winters, or spend quality time during vacations.
  7. Growing Tourism Industry: Belize’s tourism industry has experienced significant growth in recent years, attracting visitors from around the world. This trend can make owning property in popular tourist areas a potentially lucrative investment, especially if you intend to rent your property to vacationers.
  8. Diverse Culture and Expat Community: Belize is known for its cultural diversity and welcoming atmosphere. Its vibrant expatriate community allows you to connect with like-minded individuals from various backgrounds and enjoy a rich cultural experience.
  9. Ease of Property Acquisition: Belize has relatively straightforward property acquisition processes, with a clear legal framework for foreign ownership. Non-citizens can purchase and own property outright, including beachfront and island properties, without the need for local partnerships or complicated legal structures.

It’s important to note that while there are advantages to buying property in Belize, it’s crucial to conduct thorough research, seek professional advice, and understand local regulations before making any purchasing decisions.

 

Options for Belize Real Estate Financing

As mentioned above, financing in Belize is more complex than in domestic markets. We do not have the same standard mortgages and bank financing people are used to in the USA or Canada. Most real estate transactions in Belize are cash sales.

You can get a mortgage or loan in Belize from the banks. The bank will charge a high-interest rate and require a larger down payment. Because of the conservative nature and banking policies in Belize, the banks are still at a stage where the interest rates are higher than off-shore purchasers are used to. Most banks in the US will not loan to an out-of-country real estate purchase. There are, however, real estate opportunities in Belize with seller or vendor financing. Due to the Belize real estate market conditions, most owners and investors go the route of owner/vendor financing.

Seller/vendor financing (if available) is straightforward. It is a non-recourse loan with the seller/vendor carrying the note on the property (similar to how a bank carries the note on a home mortgage in the US). You take complete control of the property when all parties sign the agreement and the down payment is made.

There are three ways for purchasers to receive financing for Belize real estate:

  1. Local Belize Financing: Local banks in Belize do offer to finance land and/or property, though it is not easy (especially for foreigners). It is also important to note that the interest rates with Belize banks and terms for financing are usually higher than what people are used to at home. Local banks in Belize usually have much higher interest rates in the range of 10-18% interest with fixed terms of only 12 months. When you get financing from a local bank in Belize, the loan is closed every year and renewed at the new rate. When borrowing or lending from a local Belizean bank, it will be in Belize dollars, and most real estate transactions in Belize are in US dollars. Because most of the Belize real estate transactions take place with U.S. dollars, local financing is challenging. Local banks in Belize will also often only lend money to Belize residents or citizens.
  2. Offshore or Domestic Financing: If you are not a resident or citizen of Belize and are looking for financing, you can borrow U.S. dollars through an offshore bank. In Belize, Caye International Bank is one of the only off-shore banks in the country. Interest rates with international banks in Belize are still much higher than people are used to in their domestic markets and are around 12% to 18%, and most offshore banks, when lending to people who are not Belize residents or citizens, require a high degree of collateralization with a high down payment (often 50%). Some people do acquire domestic financing in their home country through a line of credit or refinancing their home/mortgage.
  3. Owner, Seller, or Vendor Financing: This is the most common way foreigners acquire financing for land in Belize. It is also far more common for someone to find land with financing than it is with a home or condo. Belize property owners and/or developers usually agree to property financing at better rates than the local banks. It is also very easy to qualify, as it is a non-recourse loan. The rates through seller or vendor financing are often less than what is available at local banks and financial institutions. Around Secret Beach, you are able to secure property with 20% down. Within Mahogany Bay, you can secure canal-front land with 25% down.

For more information on financing in Belize and Belize real estate opportunities with financing available, contact us at RE/MAX Belize.

 

Using a Self-Directed IRA or 401K

One way to manage costs, minimize the out-of-pocket investment, and ease the burden of taxation is to purchase real estate under a Self-Directed IRA or 401K. These structures are very easy to do in Belize and allow Americans to purchase an off-shore investment property using investment funds. The benefits of ownership under these legal entities include; access to capital for investment, and less taxation on capital gains, thus earning greater profits from the Belize real estate investment.

Real estate investors (from the US) can hold investment real estate in an IRA or 401K to gain access to capital (without paying high taxation) and reduce the tax exposure (as long as the investment capital has not been distributed to the IRA owner).

Under the IRS’s self-directed IRA rules, contributions to Self-Directed IRA accounts can be used to purchase real estate (commercial, residential, or raw land) inside and outside the United States. This allows investors to use Self-Directed IRA funds or a 401K to invest in Belize real estate.

However, contributions to offshore real estate IRAs are subject to additional rules.  For example, while the property in your IRA can be rented to others, you can’t rent it out to your family. The property can also not be used for your own personal use (it has to remain strictly an investment).

Another advantage is that the rental income from an offshore Belize real estate investment through IRA is deferred and can be made tax-free if purchased using a ROTH IRA.  Under this setup, you could, in theory, collect decades’ worth of rental income and not pay US tax.  You only need to worry about taxes when you distribute the income from the property to yourself in the future.

 

Bank Financing in Belize

Bank financing options in Belize can vary depending on the specific bank and the type of property you wish to purchase. Here are some key points regarding bank financing in Belize:

  1. Local and International Banks: Belize has both local and international banks operating within the country. Local banks include Belize Bank, Atlantic Bank, and Heritage Bank, while international banks like Caye International Bank also have a presence in Belize. These banks offer various financial services, including mortgage loans.
  2. Mortgage Loans: Banks in Belize provide mortgage loans for purchasing residential or commercial properties. The terms and conditions, interest rates, and loan-to-value ratios may vary between banks. It’s important to research and compare multiple banks to find the best mortgage options that suit your needs. It is important to note that Belize Bank mortgages are typically in Belize Dollars, while most real estate transactions are in USD.
  3. Eligibility Criteria: To qualify for a mortgage loan, banks in Belize typically require applicants to meet certain criteria. Often a borrower needs to have Belizean citizenship or residency status. International Banks can lend to foreigners, often requiring a minimum of 50% down. The requirements can include proof of income, employment history, creditworthiness, and down payment. The specific requirements may vary between banks, so it’s essential to check with the individual institution for their specific eligibility criteria.
  4. Down Payment: Banks in Belize usually require a down payment for mortgage loans. The percentage required can vary, but it is typically around 50% of the property’s purchase price. It’s important to have the necessary funds available for the down payment when applying for a mortgage.
  5. Interest Rates and Terms: Interest rates with banks in Belize are often higher than what investors are used to in their domestic markets. The interest rates and loan terms for mortgage loans in Belize can vary depending on the bank, the type of property, and the borrower’s financial profile.
  6. Property Appraisal and Legal Process: Before approving a mortgage loan, banks in Belize often require a property appraisal to assess its value. Additionally, they may require a title search and legal, due diligence to ensure there are no liens or encumbrances on the property. These processes help protect both the borrower and the bank.
  7. Currency: The currency used for bank financing in Belize is typically the Belizean dollar (BZD). However, some International Banks may also offer loans in U.S. dollars (USD), particularly for properties that cater to international buyers. It is important to note that most real estate transactions in Belize are in USD. Learn more about Belize currency.

It’s crucial to consult with a Belize real estate professional or financial expert who specializes in Belizean real estate or off-shore investing.

 

Advantages of Not Financing a Property in Belize

There are several advantages to not financing a property:

  1. Avoiding Debt: By purchasing a property outright without financing, you can avoid taking on debt. This can provide peace of mind and financial security, as you won’t have monthly mortgage payments or interest to worry about. Being debt-free can improve your overall financial well-being and provide more flexibility in managing your finances.
  2. Savings on Interest Payments: Financing a property involves paying interest over the loan term, which can significantly increase the total cost of the property. By paying in full upfront, you save on interest expenses, potentially saving you a substantial amount of money in the long run.
  3. Ownership and Equity: Buying a property outright means you immediately become the sole owner with 100% equity. You won’t have a lender with a claim on your property or any restrictions on what you can do with it. You can make improvements, rent it out, or sell it without any restrictions imposed by a mortgage lender.
  4. Simplified Purchase Process: Financing a property involves a complex process, including loan applications, credit checks, property appraisals, and legal documentation. By not financing, you simplify the purchase process. You can negotiate directly with the seller, avoid waiting for loan approvals, and potentially complete the transaction more quickly.
  5. Lower Closing Costs: When financing a property, there are various closing costs involved, including loan origination fees, appraisal fees, and mortgage insurance. By purchasing a property outright, you can eliminate or significantly reduce these closing costs, saving you money during the transaction.
  6. Increased Cash Flow: Without monthly mortgage payments, you have more cash flow available for other purposes. You can use the money for investments, savings, travel, or other personal goals. This increased cash flow can provide financial flexibility and the ability to pursue other opportunities.
  7. Reduced Financial Risk: By not taking on a mortgage, you eliminate the risk of defaulting on loan payments or facing foreclosure. You have full control over your property without the potential stress and consequences associated with loan repayment.

It’s important to note that buying a property outright requires a significant upfront investment and may not be feasible for everyone. Consider your financial situation, long-term goals, and consult with a financial advisor to determine if purchasing a property outright is the right decision for you.

Best Places to Own Property in Belize

Best Places to Own Property in Belize

Belize has many beautiful areas and destinations. Each with its own uniqueness. With a diverse landscape of islands, beaches, and jungles, there are a lot of great places to own property in Belize. The best place to own depends on what a person is looking for. That said, you have options to choose from when considering buying property in Belize.

Belize has stunning white sand beaches, lush rainforests, and Mayan ruins, with the largest barrier reef in the Western hemisphere, Belize has recently emerged as one of the top emerging tourist destinations. Belize allows full foreign ownership, which makes it a popular offshore investment destination and a great place for buying property.

The growth in tourism has been accompanied by a dramatic rise in interest in Belize real estate. Belize has become one of the hottest places to invest, and retire in the region.

Some of the best places to buy property in Belize include:

 

 

Ambergris Caye

Ambergris Caye is a popular destination for tourists and expats, with beautiful beaches and a vibrant community. Ambergris Caye (and San Pedro Town) are the top tourist destinations in Belize. With that, it is the most popular location to own and invest in property. Ambergris Caye real estate is by far the most desirable property option.

Ambergris Caye is an island on the northeastern coast of Belize. Ambergris Caye is the largest island in the country and is the most popular tourist destination. Ambergris Caye is loved for its long sandy beaches, laidback island Caribbean lifestyle, and its proximity to the Belize Barrier Reef. A lot of Ambergris Caye has been set aside as a nature preserve, marine reserve, and national park, which adds to its appeal as the most popular destination for international buyers and people looking to own property in Belize.

San Pedro Town is the municipality on Ambergris Caye. San Pedro Town and the popularity of Ambergris Caye has it among the most in-demand and developed real estate investment destination in Belize.

Ambergris Caye is one of the most sought-after locations in Belize. Not only for tourism but also for property ownership. It is the undisputed top location. As the largest island in Belize, it has been ranked as one of the top destinations for retirement and investment by Forbes, International Living, MSNBC, and more. Ambergris Caye is famous for its proximity to the Belize Reef which attracts avid divers and fishers. The reef extends the East Coast of the island, and the West Coast boasts calm waters and beautiful beaches (like the popular Secret Beach).

Ambergris Caye also offers abundant options for different kinds of water-based activities, including scuba diving the Belize Barrier Reef, deep sea fishing, snorkeling, reef fishing, jet skis, paddle boarding, kayaking, and more. Ambergris Caye also has great restaurants offering fine dining options as well as an amazing expat community.

Ambergris Caye is commonly referred to as the “Isla Bonita” (which is “the Beautiful Island”). With all it has to offer, there are few who disagree that Ambergris Caye is one of the top choices for expats who were looking to relocate to Belize or investors looking to invest in an emerging island destination.

 

San Pedro Belize Travel Guide (on Ambergris Caye)

 

 

Placencia

Placencia is a town at the very tip of a peninsula located in the southern part of Belize in the Stan Creek District. Placencia is a small, peaceful village on the southern coast of Belize with stunning beaches and a relaxed atmosphere.

Placencia has grown over the years along the peninsula to include; Seine Bight, Cocoplum, Maya Beach, and Plantation. Placencia is an ideal location for buyers looking to enjoy a tranquil lifestyle by the beach.

Placencia is a picturesque village located in the Stann Creek District of Belize, situated on a narrow peninsula along the Caribbean coast. Known for its beautiful beaches, laid-back atmosphere, and vibrant local culture, Placencia is a popular destination for travelers seeking a tropical paradise. It is often ranked in the top 3 destinations in Belize (behind Ambergris Caye & Caye Caulker).

The Placencia Peninsula (which is made up of multiple municipalities) stretches for approximately 25 miles (40 kilometers) and offers stunning white sand beaches and crystal-clear turquoise waters. The village itself is charming, with colorful wooden houses, local shops, restaurants, and beachfront bars.

In addition to water activities, Placencia offers various land-based adventures as well as lush jungles and hiking trails in the area. You can explore the Cockscomb Basin Wildlife Sanctuary, which is home to the world’s first jaguar reserve and offers hiking trails, birdwatching, and the chance to spot other wildlife. Nearby Monkey River also provides opportunities for wildlife viewing, including howler monkeys, crocodiles, and a variety of bird species.

To reach Placencia, you can fly into the Philip S. W. Goldson International Airport in Belize City and then take a domestic flight to the Placencia Airport. Alternatively, you can take a scenic drive from Belize City, which takes around three to four hours.

 

Placencia Belize Trip

 

 

Caye Caulker

Caye Caulker is the smaller island that is just south of Ambergris Caye. Caye Caulker also sees a significant volume of tourists. Though the tourism to Caye Caulker is more backpackers with a number of local hostels. While there are many water sports, and activities similar to Ambergris Caye, Caye Caulker is becoming better known for its nightlife. This makes it a popular location for the younger crowd.

Caye Caulker is also located near the Belize Barrier Reef, which makes it popular for diving and fishing enthusiasts. The southern half of the island is mostly developed and the northern portion is separated from the town by “The Split” which is a narrow waterway that runs through the middle of the island.

Caye Caulker is a smaller island than Ambergris Caye which is known for its laid-back and relaxed atmosphere, Caye Caulker attracts tourists seeking a tranquil tropical getaway. The island is approximately 8 kilometers (5 miles) long and has a narrow width of about 1.6 kilometers (1 mile). It is characterized by sandy streets, colorful wooden houses, and a car-free environment. The main mode of transportation on the island is bicycles and golf carts.

Caye Caulker offers beautiful white sandy beaches and crystal-clear turquoise waters, making it a popular destination for snorkeling, diving, fishing, and other water activities. The Belize Barrier Reef, which is the second-largest coral reef system in the world, is easily accessible from the island, offering incredible opportunities for underwater exploration.

The island has a small but lively village area with restaurants, bars, and shops. The local cuisine often features freshly caught seafood, including lobster, conch, and fish. Caye Caulker is also known for its vibrant nightlife, with various bars offering live music and entertainment.

 

Caye Caulker Island Belize

 

 

Cayo District

Cayo is near the Belize & Guatemala border (on the westward side of Belize’s mainland). Cayo is home to many Mayan ruins as well as lush jungles. Cayo is a rural area with a growing expat community, offering beautiful scenery and a laid-back lifestyle. Cayo’s most popular municipality is San Ignacio but the district is also the location of the Belizean capital of Belmopan.

The Cayo District is located in western Belize near the border with Guatemala. Cayo is a district and is the largest district in the country. Cayo is known for its natural beauty, ancient Maya ruins, and outdoor adventure opportunities. The Cayo District is home to the town of San Ignacio, which serves as a gateway to the various attractions in the area. San Ignacio offers a range of property options around Cayo. There are real estate opportunities in the jungle, farmland, remote resorts, and more.

One of the main attractions of the Cayo District is its proximity to the Maya archaeological sites. The most famous and impressive among them is Xunantunich. Other notable Maya sites in the region include Cahal Pech, Caracol, and Tikal.

Cayo also has numerous rivers and waterways throughout the district. There are also countless waterfalls including; Big Rock Falls, Thousand-Foot Falls, and Butterfly Falls to explore and enjoy.

The Cayo District is also home to several nature reserves and national parks. The Mountain Pine Ridge Forest Reserve showcases stunning waterfalls, natural pools, and the unique pine forests of Belize. The Belize Botanic Gardens and the Belize Zoo are also worth a visit for nature lovers.

 

Exploring Cayo

 

 

 

Hopkins

Hopkins is a small fishing village on the coast of Belize with a close-knit community and beautiful natural surroundings. Hopkins is just north of Placencia near the town of Dangriga. Hopkins is popular for its small-town vibe.

Hopkins is primarily a fishing village with a laid-back and friendly atmosphere. It is very much a “small town”. The village is known for its strong Garifuna heritage, and visitors have the opportunity to experience the rich traditions and music of the Garifuna people.

The beach in Hopkins stretches for several miles, offering pristine white sand and clear turquoise waters. It is an ideal destination for swimming, sunbathing, and beachcombing. The warm Caribbean Sea is also a great spot for water activities such as snorkeling, diving, kayaking, and fishing.

One of the nearby attractions is the Cockscomb Basin Wildlife Sanctuary, also known as the Jaguar Preserve. It is a vast protected area encompassing lush rainforests, waterfalls, and hiking trails. The sanctuary is home to a variety of wildlife, including jaguars, howler monkeys, toucans, and many other species.

 

 

Belize City

Belize City is the largest city in Belize and the economic hub of the country, with a range of property options available. Belize City is a coastal city and the location of the Belize International Airport (Philip Goldson International) which is the only international airport in Belize.

Belize City serves as the commercial hub and principal gateway for international travelers arriving in Belize. As the economic and cultural center of Belize, Belize City offers a mix of colonial history, bustling streets, and a vibrant local atmosphere. The city has a rich and varied heritage, with influences from the Maya civilization, European colonization, and the African, Creole, and Garifuna cultures.

Although Belize City is not typically considered a major tourist destination, it does have some points of interest worth exploring.

 

 

Corozal

Corozal is the border town between Belize and Mexico and the northeastern shore of Belize.

Corozal is a town located in northern Belize, near the border with Mexico (close to Quintana Roo & the Yucatan Peninsula). It is a coastal town/region with Chethumal across the border on the Mexico side. Corozal Town is the capital of the Corozal District and is situated on the Bay of Corozal, which connects to the Caribbean Sea. Across the bay/lagoon sea is the island of Ambergris Caye.

Most people who looking at buying property in Corozal are very underwhelmed and often pursue something elsewhere. In Corozal, there are not as many opportunities for foreign investment. Corozal is on the bayside and is more of a border town between Mexico and Belize than anything. With this, you have a lot of logistics and supply chain traffic going through. Think of it as a tropical truck stop rather than an “off-the-beaten-path real estate investment”.

The town of Corozal has a rich history, with influences from both the Maya civilization and later European colonization. It was originally inhabited by the Maya people, and several archaeological sites, such as Santa Rita, can be found in Corozal. The town of Corozal was settled by Mestizo refugees from the Yucatan Peninsula in the 19th century, and today it has a mix of cultural influences from Maya, Mestizo, and other ethnic groups.

Corozal offers a more relaxed and tranquil atmosphere compared to the busier tourist destinations in Belize. It has a small-town charm and a welcoming community. The town has a central park, known as Corozal Town Central Park, where locals gather and socialize. You can find restaurants, shops, and other amenities in the town center.

One of the main attractions in Corozal is the proximity to the beaches. The Bay of Corozal provides access to the Caribbean Sea, and there are several beach areas where you can swim, sunbathe, or enjoy water sports. Some popular nearby beaches include Consejo Shores, Sarteneja, and Corozal Bay.

Corozal is also known for its proximity to Cerros, an ancient Maya site situated on a coastal ridge. If you’re interested in exploring the natural beauty of the region, you can visit the Shipstern Nature Reserve. It is a protected area with diverse ecosystems, including mangroves, wetlands, and wildlife.

To reach Corozal, you can fly into the Philip S. W. Goldson International Airport in Belize City and then take a domestic flight or a bus to Corozal. The town is also accessible by road from Mexico, as it is located near the Mexican border.

 

 

Best Place to Own Belize Property

Ambergris Caye luckily has something we like to call “Island Economics”. When investing in an island there is only so much land available. The limitations on available land create scarcity, not only scarcity of property but also scarcity of land. There is only so much land on an island. Island economics means that you see greater property appreciation on an island due to scarcity of property and limitations on how much can be built.

Areas and destinations on the mainland with nearly endless developable land rarely see the same level of equity appreciation. One of the difficulties of investing in a property that has nearly endless room for growth (the mainland) is the fact that developers continue to build, so real estate investors don’t see the same level of appreciation that they see on an island, where the availability of land is limited.

This is basic economics, Ambergris Caye has higher demand and less supply. Mainland destinations in Belize have less demand and nearly unlimited supply. On Ambergris Caye, you have far more amenities (with the reef 400 yards off the coast), as well as beaches on the East & West Coast.

 

In Belize, there are some cheaper and less expensive property options. That said, not all Belize real estate is created equal. One of the most famous quotes from Warren Buffett is, “Price is what you pay; value is what you get.”

It is important to conduct thorough research on the area and property you are considering and to consult with a qualified real estate agent to ensure that you are making a sound investment that meets your needs and aligns with your goals. If you are looking to buy property in Belize, contact RE/MAX Belize!

 

 

Top 5 Places to Visit in Belize

Different Ways to Own Property in Belize

Belize Property Ownership

Belize is one of the most popular destinations for foreign investment in the region of the Caribbean & Central America. One of the main reasons Belize has become so popular is the fact that as a British Common Law country, there is full foreign ownership and foreigners (non-nationals) have the same ownership rights as locals. In Belize, you can own land outright (even as a foreigner) but it is still important to note that there are a few different ways to own property in Belize, and each form of Belize real estate ownership has its advantages. There are several ways to own property in Belize, including:
Types of Property Ownership in Belize

 

Different Ways to Own Property in Belize

  1. Fee Simple Ownership: This is the most straightforward way to own property in Belize. Fee simple ownership means that you own the property outright, and you have the right to use, sell, or lease the property as you see fit.
  2. Strata Title Ownership: When you buy into a Strata Scheme you own your unit (shadow footprint over the land), plus a share in common property as described in your certificate of title.
  3. Leasehold Ownership: This type of ownership grants the right to use the property for a specified period of time, typically 99 years. Leasehold ownership can be an attractive option for those who do not plan to live in Belize full-time or for long periods.
  4. Co-Ownership: Co-ownership involves two or more people sharing ownership of a property. This can be a useful arrangement for those who wish to split the costs of ownership and maintenance.
  5. Trust Ownership: A trust can be set up to own property in Belize. This can provide additional asset protection and privacy, as the property is owned by the trust rather than an individual.

 

It is important to consult with a qualified Belize real estate professional when considering any of these ownership options to ensure that you are in compliance with Belizean laws and regulations. Additionally, it is important to conduct due diligence on the property and its title to ensure that there are no liens, encumbrances, or other issues that could affect your ownership or use of the property

Owning Property in Belize as a Foreigner

One of the primary advantages to investing and owning in Belize is that foreigners can own a property outright with a fee-simple title. Belize is one of the only countries in Central America that allows foreigners to truly own property.

Belize recognizes the rights of non-nationals and the property ownership rights of foreigners. When you buy property in Belize (regardless of citizenship or residency status) you can own the property outright and your ownership rights are exactly the same as local Belizean citizens. Unlike other Central American countries and tropical tourism destinations, in Belize foreigners, who are not local to Belize, can buy a property outright with a fee-simple title (the strongest form of property ownership) rather than have to settle for leasehold ownership. With Belize’s British ties, Belize practices British Common Law and the ownership rights are very similar to that in the UK, USA, & Canada.

Another advantage of buying property in Belize is that you do not need to physically be in Belize to purchase a property, or to complete the property closing. Most real estate transactions in Belize are done remotely and the buyer does not have to physically be in Belize. This makes buying real estate in Belize as a foreigner especially easy and appealing.

There are different types of titles and ownership structures in Belize but are still good and all legal. When you buy property in Belize, you have a few options when it comes to the ownership structure.

 

Belize Real Estate & Property Ownership Options

In Belize, most land opportunities and detached single-family homes allow for fee-simple titles and have a physical copy of the title from the Belize lands department. Most condos or developments in Belize are owned with co-op shares or strata titles. Strata Title enables one to pass physical title to a ‘slice of air with a building in it’ without owning the land that is below it. An example of Strata Title would be purchasing and taking title to a 3rd-floor unit without owning the shadow footprint of the land below.

Many developers around Belize erroneously refer to their projects as ‘condos’ when they are not located in a new registration zone. It should be noted that true condominiums in Belize only exist in the New Registration zones where the Strata Act is applicable.  If the ‘condos’ are not in the new registration zone then they should be referred to as ‘units’ or ‘residences’ and, in most cases, they will be titled via corporate share certificate(s).

It is also important to note that Belize has a lot of parallels to the US & Canada when it comes to real estate and real estate appreciation. Condos rarely see the same level of appreciation and most of the condo projects in Belize (especially presales) are co-op share ownership.

 

1. Fee Simple Title

Fee Simple Title is Freehold ownership, which is by definition;

  1. A permanent and absolute tenure in land with the freedom to dispose of it at will, especially (in full fee simple absolute in possession ) a freehold tenure, which is the main type of land ownership. Fee-simple title is an interest in land.  Land owned in fee simple is owned completely, without any limitations or conditions. This type of unlimited real estate is called absolute.  A fee simple is generally created when a deed gives the land with no conditions, usually using the words like “to John Doe” or “to John Doe and his heirs”. (source)

In British Common Law, a Fee Simple, Freehold Ownership, or Fee Simple absolute is real estate in land or physical property and is of freehold ownership. A “fee” that is used as the basis for the title is a vested, inheritable, present possessory interest in land and physical property. A “fee simple” is real property held without a limit of time. This means absolute and permanent ownership of property under the governing common law.

A Fee-Simple Title and Freehold Ownership is the highest possible form of property ownership. There are also properties that are known as a “fee simple absolute,” which is without limitations on the land’s use.

As Mark Twain famously said, “Invest in land; they are not making any more of it.”

If you’ve bought land or a house in Belize, it’s likely you own the property outright with a fee-simple title. This is the strongest form of property ownership and means that you own the “real property”. The fee simple way of owning real estate is the most common type of homeownership in the USA & Canada. Belize is also one of the few countries in the region with fee-simple titles and full foreign ownership. The fact foreigners can own a property outright with a fee-simple title is one of the major draws and advantages of off-shore real estate investment in Belize.

When you buy land or a home in Belize you will receive a “fee simple” title to your property which gives you full and complete ownership, unlike some Central and South American countries where the title is held in trust by a bank or similar institution. Other countries will offer leasehold ownership to foreigners which means you only own the land/property for a set period of time.

Belize is part of the British Commonwealth and with that, Belize has a legal system that is based on British Common Law. This comes with fee-simple land and property ownership. Property purchasers can take title to freehold property in Belize.

The Land Laws of Belize and property ownership Laws of Belize are derived mainly from the Common Law and English Statutes of the 19th century. The Law of Property Act, Chapter 190 has a lot of similarities to the Real Property Act 1925 of England and are nearly mirror images of each other. Other relevant statutes and laws that Belize has used and implemented include the Registered Land Act, Chp 194 which is a statute that governs all land transactions in Belize.

 

2. Strata Title Ownership

It should be noted that true condominiums only exist in the New Registration zones where the Strata Act is applicable. This includes San Pedro Town, Seine Bight, and Belize City are the only locations that have true condos with Strata Titles. Strata Title enables one to pass physical title to a ‘slice of air with a building in it’ without owning the land that is below it. i.e.: one can purchase and take title to a 3rd-floor unit without owning the shadow footprint of the land below.

If a condo has strata title, it provides a higher level of ownership and is a true ‘condo’. In Belize, every property has an individual land title, when you purchase a home or land in Belize you receive a copy of the land title. When you buy a property with a fee-simple title you take possession of it when you purchase a house or a piece of land in Belize.

When you buy a property that is part of a strata title, you own your unit or condo. When you own a strata title property or condo, you have individual ownership over your apartment, unit, condo, or townhouse.

The Strata Titles Registration Act, Chapter 196, of the Laws of Belize, governs the issuance of titles to condominiums in Belize. These condo titles are referred to as “Strata Title”. The Strata Titles Act essentially enabled developers to construct condominium developments in Belize and to issue freehold titles to each unit created in those Developments.

Condominium structures in the Caribbean are very rarely high-rise buildings. They are commonly relatively small two to four-story buildings. This is largely due to building restrictions set by the CBA (Central Building Authority). Unlike large metropolis cities, the structures in Belize are rarely above 3 to 5 stories and are primarily used by vacationing foreign residents. Developments that offer Strata Titles are most commonly found in San Pedro, Ambergris Caye, Hopkins, and Placencia.

When a developer of a condo project applies for Strata Title, the titles of the various units are issued to the Developer and are put in the developer’s name. As each individual unit is sold, the developer transfers the strata titles to the new owners (purchasers).

A property or development in Belize can only apply for strata title when the unit is built or near completion. This makes it challenging to obtain Strata Title since most of the capital for investment is tied up in development. Because of the laws pertaining to Strata Title, and having to be at or near completion to apply (and the application takes time for approval), most condos or units offer co-op share ownership for presale, which can have risk. The tedious Strata Title process is why so many condos go the co-op share ownership route. If you are looking at buying a condo in Belize, we suggest ensuring the property at least has a strata title.

 

3. Leashold Ownership

In Belize, most residential real estate and land are owned on a fee-simple basis (this is similar to the US & Canada). This is not the case in most of Central America & The Caribbean where land and home sales are in leasehold ownership which are long-term leases with the national government or have layered trusts. Belize is one of the only countries in the region that offers full foreign ownership and fee-simple title.

Under the leasehold model, one party owns a property while the tenant can use the land for a set number of years. This is common in Costa Rica, Mexico, Panama, etc. Most countries in the region have restrictions on foreign ownership. This is not the case in Belize, where you truly own real property. Generally, Leases involved in these arrangements are usually long-term, typically lasting 55 years to 99 years or more.

Some owners may grant something called a “life lease” where the tenancy remains until the lessee passes away. This means the property itself can not be passed on or inherited. In that case, the property reverts back to the grantor.

If you enter into a leasehold arrangement, you’ll have to pay a fee to use the land, unlike fee simple ownership which requires no rent payments or renewals. With fee simple, you do not have to renew the lease as you own the property outright. With a fee-simple title, you own any home on the land forever. But with leasehold, when the lease ends, both the land and home will revert to the previous owner – unless you negotiate a new lease or renew the lease before the old one expires.

When you own a property with a leasehold property you only “own” the property or real estate for a fixed period of time. When you agree on a leasehold property, there will be a legal agreement with the landlord (sometimes known as the ‘freeholder’) called a ‘lease’. This tells you how many years you’ll have rights to the property. Ownership of the property returns to the landlord when the lease comes to an end or expires.

There are a lot of restrictions on foreign ownership in countries like; Costa Rica, Honduras, Panama, Mexico, etc. These countries often have leasehold contracts or require a trust to own real estate. That is not the case in Belize. Belize has no restrictions on what foreigners can own. There are some condo developments in Belize that are leasehold or co-op share ownership and usually use this structure if they’re bought through shared ownership or a co-op.

 

4. Co-Ownership Shares or Housing Cooperative

This ownership structure is popular and is known to North Americans as “Co-op”. This is the weakest form of ownership in Belize and the buyer does not have any form of title. There are numerous downsides to this form of ownership, mostly being that share certificates cannot be mortgaged by a lending institution, and insurance on the unit is challenging. A housing cooperative or “co-op” shares are a type of residential real estate option that is actually a corporation that owns the real estate.

The ‘owners’ within the development do not own their units outright. Instead of owning the units, each resident is a shareholder in the corporation based in part on the relative size of the unit or equity stake the unit that they live in has. A co-op share ownership in real estate is a way to own a primary residence, through the shares of the corporation. With housing cooperative or co-op share ownership owners own the shares, they however don’t own their units outright or the land itself; instead, each resident is a shareholder in the co-op.

Some co-op shares real estate options allow owners to sell their co-op shares (equity in the unit) in the open market, depending on the development. Often they have restrictive clauses that limit resales. This limits the liquidity of the property.

In Belize, when a condo appears to be cheap or “too good to be true” it is generally because they have co-op share ownership. Co-ops when it comes to real estate in Belize can be less expensive than homes or true strata title condos since they operate on an at-cost basis, collecting money from residents to pay expenses. Often padding additional profits to the developer.

Even though co-op share ownerships appear to be a great deal, they often come with more risk and a low level of ownership control. Before buying shares in a co-op ownership condo, be sure to check out the company’s financial situation and the fees involved.

A lot of presale condos use co-op share ownership. The resale is very difficult since the unit cannot be mortgaged and they are very difficult to insure in Belize.

 

5. Trust Ownership

In Belize, you can own property in a Trust. Which is commonly done through an IBC (International Business Company). Belize uses IBC laws as a form of asset protection. Trust ownership in Belize is commonly used in conjunction with an IBC (International Business Company). By using a trust to hold shares in the IBC, an additional layer of legal protection is provided for the owner of the property.

Trusts have become one of the dominant instruments to facilitate international finance and hold property internationally. The reason for setting up a Trust is that every individual or company has the desire to protect, preserve and enhance their wealth, and Belize has become one of the top destinations for international financial services looking to diversify a Trust investment. Belize real estate is a great means for realizing the goals of wealth growth, protection, and preservation. Belize allows the creation of a trust, except for a unit trust (for a co-op share ownership condo) and the trust ownership must be in writing.

The main advantages of Trust Ownership are as follows:

  • Saving on Inheritance Tax or Estate Tax: Even though Belize does not have any estate tax or inheritance tax, a country outside Belize may have enforceable taxes. Through a Trust or IBC, on death, the inheritance tax, normally assessed on the value of the shares, would generally be eradicated.
  • Asset Protection: Assets (like real estate) within a trust usually cannot be reached by creditors who might arise as a result of financial difficulties, litigation, divorce proceedings, etc.
  • Avoiding Probate: Through trust ownership, assets can be smoothly passed on to the next generation without disruption, substantial costs, delays, loss of confidentiality, etc.
  • Lifetime Tax Savings: During a lifetime, substantial income and capital gains tax advantages may result from setting up the trust.

Trust Ownership uses a Trust to own the property. A Trust is a specific legal relationship, that is used in British Common Law. By means of a Trust, the owner of certain assets (“Settlor”) transfers these assets to an independent other party (“Trustee”). The Trustee, in turn, is legally bound to maintain and manage these assets for the benefit of another person or group of persons (“Beneficiaries”).

The core principle of the Trust lies in the separation of the legal title (ownership) of the asset from the benefits derived from that asset. The control over the asset (right to dispose of) is also separated from the benefits derived from that asset.

 

IBC Property Ownership

There are different types of titles and ownership structures in Belize but are still good and all legal. When you buy property in Belize, you have a few options when it comes to the ownership structure. A lot of real estate transactions in Belize are through corporations and have property ownership in an IBC with fee-simple title. Owning a property in an IBC is still fee-simple full ownership with an added layer of asset protection and tax optimization.

When you buy a property in an IBC there is no stamp or transfer tax when a property is held in an IBC (International Business Company). When you buy a property, you own it outright. We have a lands department, which manages the titles of each property. I always suggest buying a property in an IBC or having a property put in an IBC (especially as a foreigner). There is no stamp or transfer tax when a property is in an IBC. If a property is not held in an IBC, there is an 8% stamp/transfer tax when you buy or sell the property as a foreigner or non-resident and a 5% if you are a resident or Belizean (or Belizean corporate entity). When the property is in an IBC, you don’t pay the stamp or transfer tax, you have an added layer of asset protection (if someone sues you in the US, they can’t touch your Belize asset), and you have improved liquidity when you sell the property and remove liability.
You own the IBC, and the IBC owns the property with fee simple title. The advantages are;
  1. Tax optimization as you don’t have to pay stamp or transfer tax.
  2. Asset protection.
  3. Improved liquidity.
  4. Faster transfer of ownership.
  5. Ownership ambiguity.

 

If you are looking to get the most out of your Belize investment and have the best value when it comes to Belize real estate, we suggest buying land and owning a property with a fee-simple title. We also suggest using an IBC (whether buying a property in an IBC or having it put in an IBC). The most desirable thing about Belize real estate is the fact that Belize has full foreign ownership and foreigners (Americans & Canadians) can own a property outright with a fee-simple title. When you purchase a condo (especially something with co-op share ownership) you erode the largest value of buying and investing in Belize.

 

Belize Real Estate & Exodus of Expats

The Exodus of Americans Moving to Belize

Every year, more-and-more people are looking at investing and relocating off-shore. Whether it is for lifestyle or retirement, Americans & Canadians are rethinking their lives and where in the world would provide the best future. This is shown by the recent migration stats.

Americans & Canadians are leaving their home countries and seeking foreign visas in record numbers, according to immigration lawyers and expatriate organizations. Belize saw an unprecedented number of Americans not only inquiring about Belize real estate but also following through on their pledge and taking the steps to leave over the last 3-years (2020, 2021 & 2022). This is seen by the growth in the expat population on Ambergris Caye over recent years.

The number of Americans who were recorded as having given up their citizenship or U.S. residency soared to 5,816 in the first six months of 2020, compared with 2,072 in all of 2019, according to data from the Internal Revenue Service.

Dan Prescher, the senior editor of Internationalliving.com, said traffic related to “how to move out of the U.S.” surged 1,676 percent in 2020 and has been a continued trend since.

“Quieter, more stable countries start to look appealing,” he said.

The exodus has been led by not only baby boomer expats, but also young professionals looking for an opportunity and parents looking for countries with open and safe schools that provide futures for their children. No matter the age, the group largely consists of Americans with financial means and the ability to work virtually, or are in a position to relocate.

 

Why are people leaving?

The U.S. State Department reported in April that there are a record 8.7 million Americans live abroad. This number alone speaks for itself – never before has such a large group of U.S.-born citizens lived abroad. They’ve decided that it’s time for a change, to move to a new location where they are able to not just survive but thrive.

People’s motives for leaving or seeking relocation differ. But overall, the objective is a better life and a more promising future. The IMMI Group analyzed the top 10 motives for leaving the US, the list includes;

  1. Money
  2. Cost of healthcare
  3. Taxes
  4. Government regulations
  5. Freedom

 

Why People Are Looking at Belize & Ambergris Caye

Belize Real Estate & most of all Ambergris Caye Real Estate have seen a boom over recent years. Most of the buyers are people looking at living and/or investing overseas. This is seen by the growth in Belize real estate transactions over recent years;

While there is no nationwide MLS for Belize to track the total sales data and the number of real estate transactions, RE/MAX Belize is the largest real estate company in Belize with over 100 agents in 13 offices and shows a good indication of where the market is at and how it has grown. 

Total sales volume increased 8.7% from 2019 to 2020, followed by a staggering 167.7% from 2020 to 2021.  Based on current year-end projections, sales volume and real estate transactions in Belize are expected to grow by 301.5% year-over-year from 2021 through 2022.

From the beginning of 2020, at the start of the COVID pandemic, through to 2021, total Belize real estate sales volume has increased by 190.94%.

For RE/MAX Belize, the market has seen the number of sales exceed 2019 total sales volumes by 300% (299.6%).

Potential buyers are increasingly younger with more-and-more buyers being in their 40’s and 50’s (compared to retirees of earlier years).  Most of the people purchasing Belize real estate are from the US and Canada. Among the top reasons for considering Belize for second homeownership:

  • Allows diversification outside the USA or Canada
  • Provides a safe secure alternative during societal unrest
  • The only English-speaking country in Central America
  • Close geographic proximity to the USA
  • No capital gains tax, very low property taxes 
  • Tropical Caribbean climate
  • World-class fishing, diving, snorkeling, and watersports 

Second home ownership in Belize is like “going abroad with training wheels”.  It’s a very safe and easy experience, and the number one comment from those who have done it is that they wish they had done so sooner. 

 

Ambergris Caye Relocation

The top reasons people choose Belize and Ambergris Caye real estate include;

  • Safety
  • Tax protection
  • Accepting of new residence
  • Stable political climate
  • Affordability
  • English speaking
  • Schools & Education
  • Racial and cultural diversity and acceptance
  • Currency pegged 2:1 with USD
  • Climate
  • Opportunities and room to grow
  • Freedom!

Many countries have restricted accessibility to residency, which makes travel and relocation more difficult. Not Belize. Right now Belize is open and accepting tourists, expats seeking offshore residency, and citizens. Belize is a small country that is very pro-foreign investment with a small population. The country’s agricultural independence and desirable climate make it one of the top destinations for Americans & Canadians seeking relocation.

There are many other thriving places to make a life. This has led to many people seeking a brighter tomorrow, a life that provides freedom, safety, security, and support.

 

8 Reasons to Buy Overseas Real Estate Right Now

8 Reasons to Buy Overseas Real Estate

Luigi Wewege

President, Caye International Bank

  • There was an upturn of 3.2% in the GDP figures in the third quarter of 2022, but the change is unremarkable.
  • Despite indications of growth in some economic activities, most economists suggest the economy will continue to slow for at least the next few months.
  • Financial markets and other investments in the US, including property markets, remain unpredictable, creating a demand for more tangible assets and the diversification provided by overseas real estate.

The Bureau of Economic Analysis readings for the third quarter showed a +3.2% change in the US GDP in the third quarter, compared to -0.6% in the second quarter. Despite growth in some economic activities like industrial production, retail sales, and job growth, many economists still fear the possibility of a lurking recession.
Investors tend to turn to hard assets at times like these, and since the US property market faces a price slump, they look for overseas property opportunities.
“There are many reasons why investors turn to overseas real estate,” says Luigi Wewege from Caye International Bank, “but one of the major reasons is seeking a haven from the type of economic volatility we currently face.”

 

Here are eight reasons to buy overseas real estate right now

1. Discounts Due to Currency Advantages

When buying with USD or another strong currency, you can buy much more property in a market abroad with a weaker currency. Currently, the USD is at historic highs, meaning enhanced spending power.

The current surge in the value of the US dollar is producing unexpected opportunities for property investors holding the currency in many overseas real estate markets. It’s at historic highs against the euro, the pound, and other key currencies.

 

2. Currency Diversification

Buying a house overseas allows you to gain the benefits of diversifying into another currency. Currency diversification through property enables you to gain the benefits of earning an income or equity gain of the property in that country’s money.

Buying with the current strong conversion rate for the USD can also mean that even if the property value does not increase in local currency, you will have appreciation if the exchange rates return to historical averages.

 

3. Cheaper Properties

Besides the advantage of currency savings, properties in many overseas countries are highly affordable compared to properties in many US beach towns. “Caye International Bank facilitates real estate loans in five currencies and low-interest rates, with negotiable amortizations and terms,” says Wewege.

 

4. Earn an Income

Whether you buy a second home or have your eye on investing some money, overseas real estate can generate an income that can help pay for the property running costs and create a nest egg in the local currency. Even if you plan to holiday at your overseas property, you can rent it out short term to others.
Remember that most European countries have lower rental net yields for long-term rentals, but these increase with short-term rentals, especially in the coastal areas of the Mediterranean.

 

5. Privacy And Tax Advantages

Americans don’t have to report their personal or rental overseas property to the IRS. Therefore, your foreign property remains out of reach to lawsuits, your ex, and the US taxman.
There are also some US tax advantages when you rent out the property. For example, the interest paid on your mortgage is deductible from your taxable US income, as is the cost of trips to check on your asset.

 

6. Diversify Your Portfolio

Investing some money on overseas real estate diversifies your investment risk because it’s in another market. But, as we said earlier, you also diversify your exchange rate risk and avoid liability risks.

 

7. Brings Residency Perks

If you want to fast-track residency to countries like Greece, Spain, and Portugal to access the Schengen Area, you can purchase a property as part of their Golden Visa Programs. In addition, some countries like Northern Cyprus and Montenegro don’t have a price limit on how much you can spend to receive residency.

 

8. Low-Cost Vacations

Besides investing your money wisely, buying overseas real estate means you can choose a place to holiday without adding expensive hotel stays. As a result, you can enjoy the benefits of holidaying (or even retiring) somewhere with a lower cost of living, and you can escape the cold winters of the US.

 

Final Take

As you can see, buying overseas real estate makes perfect sense right now, especially if you want to diversify your investments and create an income in another country. In addition, your investment can provide you with a dream holiday destination and a financially secure retirement. For more information on investing offshore and in Belize real estate contact RE/MAX Belize!

 

By Luigi Wewege

5 Reasons to Invest in Belize Real Estate

Investing in Belize Real Estate

Belize real estate has become a popular topic among investors. Investing in foreign real estate can feel overwhelming and knowing where to invest requires a lot of research. When investing offshore and buying foreign real estate, an investor has nearly endless options and destinations to choose from. With all the options and countries around the world, it is hard to know which location has reached its peak and which has room for growth (especially from an investment standpoint). Investors always want to find real estate with appreciation growth potential.

We’ve all heard real estate investors say, “location matters,” and it is easy to see why destinations in the Caribbean as well as South and Central America are so appealing. The regions are home to some of the world’s most beautiful beaches, a warm climate, and an affordable cost of living. All of these are factors that make an offshore investment appealing, but different locations have advantages. Many foreign investors are realizing that Belize real estate has some untapped potential and that the market is only just starting to “take off”.

Take a look at some of the five top reasons why it is smart to invest in Belize real estate.

 

5 Reasons to Invest in Belize Real Estate

 

1. Belize Tourism is on the Rise

If you are looking to invest offshore and in a foreign market, you will likely want to find a destination that is on the rise and has growing tourism (which increases awareness). Luckily, Belize tourism is really booming, with more-and-more people traveling to Belize and visiting Ambergris Caye.

Every investor has a slightly different motive or reason to invest in Belize real estate. Sometimes, buyers/investors just want to have their own slice of paradise, a tropical getaway. You might invest in a Belize vacation property so that you can spend time in Belize, or eventually have your nest for retirement.

However, one of the leading reasons people invest in Belize real estate is the tourism income generated from nightly rentals and vacation rentals. Investors looking at Belize often look at the cash flow and yield potential with plenty of buyers interested in buying real estate as a way to earn a profit. If you want to turn your real estate into an income generator, that produces passive earnings, you will want to invest in a market with growing tourism.

Belize tourism hit an all-time high in 2019, with over 500,000 overnight tourists arriving in the country. In 2022, Belize’s tourism rebounded to nearly pre-COVID numbers. In 2022, Belize’s tourism was at 81% of its peak. If you take Belize’s tourism growth over the last 12 years (2010 to 2022) it grew at a rate of 14.6% annually. That is compounded year-over-year growth. Very few destinations in the world see double-digit annual tourism growth. You can see the year-over-year growth illustrated below;

Belize 2022 Tourism

Belize Tourism 2018 to 2021

Belize Tourism Recovery

Belize Tourism Board

 

In 2019, Belize saw more visitors overall, both via the airport and cruises, than any year prior. In 2022, we saw the tourism numbers nearly reach the 2019 peak (81% of peak pre-COVID tourism). Some of this can be attributed to the strong investment The Government of Belize and the private investment sector have made in infrastructure development projects in the region. It is also largely associated with the emergence of branded hotels in Belize like; Hilton, Marriott, Margaritaville, Wyndham, Six Senses & Four Seasons.

Belize’s tourism is on the rise, and that is a strong investment indicator. The more tourists, the more rooms are rented, and the better the vacation rental ROI.

Not only has Belize seen an annual tourism growth rate of 14.6% over the last 12 years, but Ambergris Caye (the #1 destination in Belize) has seen the highest volume of all Belize tourism while also seeing a rise in population. The population of Ambergris Caye has grown by an annual average of 8% over the last 5 years and grew at a rate of 17% the 10 years prior.

For those who own Belize Real Estate & Ambergris Caye Real Estate, the increased awareness, and tourism correlate to a rapidly growing audience of potential renters who may wish to rent a Belize vacation property.

A growing tourism industry isn’t just ideal for those who want to generate rental revenue each year. It is also ideal for those who want to see the value of their property grow. The more people that visit, and the higher yield an income property produces, the higher the resale value. As Belize continues to grow, so will the value and price of real estate.

 

2. Foreign Investors Actually Own Their Property

Most destinations in the region (Costa Rica, Panama, Mexico, etc.) do not grant foreigners the same property ownership rights as locals. One of the biggest risks of investing in real estate overseas is that ownership rights can be confusing, and often a foreign investor will not actually own the real estate. In some destinations, citizenship or residency is required in order to buy and own real estate outright. For a foreign investor investing overseas, this can mean less security and more risky investment. It is not uncommon for countries to have a leasehold or require some sort of trust for a foreigner to own real estate.

It is very common when you buy international real estate, an investor is really only buying a “leasehold” for a set number of years. If you plan to leave the property to your children or dependents in the future, this can again be a concern.

With Belize real estate and Belize property, none of these issues are a concern. Belize is one of the few countries with British Common Law that has full foreign ownership and allows foreigners to have freehold property ownership with a fee-simple title. In Belize, it is rare to hear of disputes over land ownership. A property owner is granted a land title, which they own outright. Anyone, even foreign investors, can purchase property in Belize. To own and invest in Belize, you do not need to be a national, have citizenship, or be a resident. You can truly own property as a foreigner.

Even better, when buying Belize real estate as a foreigner means that you own the property outright, and leaseholds are virtually nonexistent. This gives an investor a greater sense of security and more peace of mind. Belize is one of the best offshore markets to invest in for capital protection. Belize also does not recognize squatting rights.

 

3. Stable Currency

When investing in foreign real estate, you want to ensure your investment is secure and that the dollar value of that investment appreciates with a stable currency. It is important to ensure you are investing in something with property value retention. Investing in a market with high inflation and owning an asset in a volatile currency is a risk and a valid concern. When investing offshore it is important to consider if the local currency of the jurisdiction you are considering fluctuates and avoid markets with high currency volatility/inflation.

The Belizean currency is the Belizean Dollar which is a pegged currency at 2:1 with USD. In Belize, currency fluctuations are minimal since we are pegged to USD, and the fact that almost all real estate transactions are in US dollars. If you own Belize real estate, you own an appreciating asset in USD. You own the property in a stable currency without the risk of domestic currency inflation.

The Belize Dollar is pegged to the United States Dollar. Two Belize Dollars always equals one US Dollar. The fact that real estate transactions are primarily in US dollars makes it incredibly easy and straightforward. The fact you own the real estate asset in USD means that you won’t see a dip in the value of your property just because the market fluctuates or the currency experiences rapid inflation (like Argentina or Venezuela).

The fact Belize has a pegged currency and real estate transactions are in US dollars is a big advantage, especially if you live in the United States or deal financially in US Dollars. Although property values can, change and fluctuate with the market, Belize real estate won’t drop due to currency issues.

 

4. Belize Real Estate & Property Taxes

Owning real estate anywhere has a cost of ownership called “holding costs”. Anyone who has ever owned property anywhere in the world knows that there are ongoing costs and expenses to consider. Maintaining a home or property costs money, property taxes can be significant, and the taxation on a property is something someone must consider when investing offshore.

Property taxes in Belize are surprisingly low. Real estate taxes and property taxes are based on the undeveloped value of your land. The property taxes someone pays do not fluctuate with the home or property improvements. This makes property taxes in Belize very low. Canal-front homes have annual property taxes of $108 per year, while other off-beach properties near the West Coast of Ambergris Caye start at $75 per year. Belize is a low-tax jurisdiction, and one of the major draws to owning property and real estate in Belize is the fact that the cost of ownership is so low.

The cost of property ownership in Belize is much cheaper on a year-to-year basis than in many comparable destinations, keeping costs of ownership low and increasing the investment return.

 

5. Belize is an Unsaturated Market with Low Competition

With all the benefits and advantages of owning and investing in Belize real estate, you might assume that it is a seller’s market or that property options are limited. With the tax advantages, growing tourism, property ownership rights, and the fact you own an appreciating asset in USD (a stable currency) you would assume that Belize is a saturated market. In reality, it is the opposite, and Belize is a very unsaturated market with low competition.

In Belize, it is still very much a buyer’s market, and there is a scarcity in supply. Although there has been growing interest from foreign investors, and a growing expat population, the market is far from saturated.

We’ve all heard the age-old saying, buy low sell high. The vast majority of properties within a saturated market are already overpriced and thus in these conditions, it is much harder to find good, let alone great investment opportunities.

Properties within an infancy market that is unsaturated have the most potential upside in the future. The key: finding something within an infancy market that lies in the path of progress. Examples would be Ambergris Caye Real Estate & Belize Real Estate.

The increase in population and tourism has led to a scarcity of rentals and overall lodging inventory. In Q5 2022, the lodging inventory on Ambergris Caye decreased by 5% (due to population growth) and the lodging inventory has decreased by an astonishing 20% over the last 3 years.

 

Ambergris Caye Lodging Inventory

*From AirBNB

 

In short, there are more people who are eager to spend time in Belize, and there are even more people traveling to Belize. When you take the increase in population and the increase in tourism, you understand the investment and rental income potential.

Increased Demand + Limited Supply = Higher Occupancy & Higher Rental Rates = Increased Revenue

It is rare to see and have an opportunity to invest in a destination that is growing as rapidly as Belize and Ambergris Caye which has a decrease in lodging inventory.

There is plenty of undeveloped property still in Belize and on islands like Ambergris Caye (which have island economics). Belize real estate is often much lower than investors expect (given all the advantages). Belize is now one of the leading International jurisdictions for offshore banking in Central America and you will discover that investment dollars go further in Belize and yield much higher returns than in many other countries.

 

There are many other reasons to invest in Belize real estate, these 5 are just some of the top. Overall, there are many other reasons why real estate in Belize is a smart investment, particularly for those interested in diversifying their financial portfolio and investing offshore. Whether you’re searching for a retirement destination, a rental income property, or a vacation home for the family, Belize real estate offers a wide variety of options and opportunities.

To learn more about Belize Real Estate & Ambergris Caye Real Estate contact REMAX Belize! We look forward to helping you find property listings and start investing in Belize.

 

Inflation & Global Economies Impact on Belize Real Estate

Inflation & Belize Real Estate

A recession and inflation are not new things, they are part of any economy. The US just came off a long bullish market. Just because inflation and recessions happen, doesn’t mean investment stops, strategic investors look to new avenues and leverage cost-effective ways to place capital.

When economies turn, people no longer look for Return on Investment, they look for Return of Investment. They start looking for investments and strategies around;

  1. Wealth Preservation
  2. Asset Protection
  3. Tax Optimization

When looking at a real estate investment, there are generally 2 elements cash flow and appreciation. Savvy real estate investors and people investing in offshore markets like Belize tend to dive a little deeper and there are essentially 4 pillars strategic real estate investors look for;

  1. Capital Protection,
  2. Capital Growth,
  3. Yield (Cash Flow),
  4. Favorable Taxation.

Luckily, when you invest in Belize Real Estate, you are in a position to check all 4 boxes. You also have the added benefit of limited supply and scarcity, in a market with growing demand.

When looking at a strategic investment strategy, it is important to remember that money doesn’t just “go away” it moves. A recession, by definition, is;

“a macroeconomic term that refers to a significant decline in general economic activity in a designated region. It had been typically recognized as two consecutive quarters of economic decline, as reflected by GDP.”

In times of globalization, markets are more dependent on each other but are also still independent. What happens in one country, does not mean the same will happen in another. Just because one region is experiencing economic decline does not mean that another region will see the same effects.

In 2021, the US economy is seeing the highest inflation rates in over 40 years. This is largely fueling a lot of what is happening in the global economy. Real estate, however, is one of the only assets and investments that is pegged against inflation. When looking at an investment that is more resilient to inflation, you want something that has price adjustments that meet or are pegged to the rate of inflation. If you have an investment asset that adjusts with inflation, while still producing cash flow, you are well-positioned and diversified.

Typically, the more inflation-resistant investments are able to pass price increases along to their customers. This remains true in Belize. I am not by any means saying we are recession-proof, but Belize (especially real estate) is well situated, all things considered.

One important thing to note is that property values and rental income both tend to keep up with inflation over time, and the investors that invest in real estate tend to outperform the market during inflationary periods. For example, in 2021, inflation reached its highest level in 40 years, and real estate (both rental income and asset appreciation) outperformed the S&P.

Generally, real estate assets and investments perform their best when inflation rates exceed 7% (which they do now). The inflation-hedging capability of real estate stems from the relationship between GDP growth and the demand for real estate. As economies expand, and people relocate or reallocate, the demand for real estate drives rents higher. When you have a combination of residents looking for rentals combined with the vacation rental market, you are able to adjust. Higher rents with better occupancy, in turn, translate into higher capital values. Therefore, real estate tends to maintain the buying power of capital by passing some of the inflationary pressure on to tenants and by incorporating some of the inflationary pressure in the form of capital appreciation.

 

Real Estate Investment & Inflation

When compared to other investments, real estate tends to hold up well against inflation. But it’s important to realize that there are many different types of real estate investments, and not all have the same inflation resistance. When looking for more inflation-resistant real estate assets it is important to look for;

  1. Short-term lease durations: This allows you as an investor to quickly adjust rents (market rent and net rent) to meet the demand and inflation. A vacation rental market is perfect for this. Typically, the average rental on Ambergris Caye is 6 days, and prices can very quickly be adjusted. You can also offer monthly rental rates, which avoid locking in at below-market rent for a year.
  2. Price powering: Can you control and quickly adjust the price when needed to match inflation? Vacation rentals give you high control as you can continuously adjust rates to meet inflation and/or demand. A lot of other rental markets have vacation rental restrictions (controls), or rent controls in place. Belize does not, which makes it a great investment when it comes to ownership control.
  3. Resilient or increasing demand: Belize has seen double-digit tourism growth every year except in 2020 (COVID restrictions). The country has just entered the world’s radar and has frequently been at the top of the list when it comes to emerging vacation destinations.
  4. Fewer Regulations: Belize does not have rent controls. This allows you to manage your rentals as needed. We are also one of the very few “pro-landlord” countries in the region. We do not recognize squatters, and as the owner of the property, you can dictate who stays there and for how long.
  5. Favorable Taxation: Belize is a tax haven. Belize has very low property taxes. Low corporate tax. No capital gains tax. And no estate tax.

 

Recessions and inflation are not permanent. Real estate investors make money through rental income and appreciation. Good real estate investments offer passive income, stable cash flow, tax advantages, diversification, and leverage. It is important to invest not only for the short term but for the long term as well. Even though Belize real estate is counter-cyclical when compared to other real estate investments, we still see the boom in bullish markets when people have more accessible capital. After a Bear market comes a Bull market which will see all real estate (especially vacation markets) have a more substantial appreciation.

In regards to investment, Belize is unique as it is both Central America & the Caribbean, the mainland has more similarities to the Yucatan Peninsula (Cancun, Playa Del Carmen, Tulum, etc), while Ambergris Caye is more comparable to the Cayman Islands, The Bahamas, British Virgin Islands, Etc. The fact Ambergris Caye is an island, there is far more scarcity of property than being on the mainland. As a real estate investor, scarcity works to your advantage for both rental income and property appreciation. The fact that Ambergris Caye is one of the few opportunities with high tourism growth and land available, makes it a unique opportunity in today’s market.

Ambergris Caye (being the largest island in Belize and #1 destination), luckily has island economics. Island economics means that you see greater property appreciation on an island due to scarcity of property and limitations on how much can be built. The island economics of Ambergris Caye creates scarcity, not only scarcity of property and rental accommodations but also in completed resale homes.

Belize also has growing tourism with unprecedented COVID tourism recovery. Ambergris Caye (the #1 destination in Belize) and the island where the popular San Pedro Town is located see over half of all tourists coming to Belize. Even though Ambergris Caye is experiencing tourism growth, the destination has not seen rental accommodations meet the demand.

Even though tourism is growing and we have seen Belize tourism rebound in 2022 to pre-COVID numbers, the total rooms for rentals have stayed stagnant with almost no new inventory and often even a decline in inventory. Tourism pre-COVID grew by over 60% in 5 years (over double-digit annual growth of 14.6%) but lodging and inventory stayed the same. Even now, rental inventory saw a -5% decrease from Q4 of 2022 to Q1 of 2023. Below you can see the lodging and rental inventory on Ambergris Caye over the last 3 years;

Rental Inventory: From Q4 2022 to Q1 2023 lodging inventory decreased by -5%:

 

Ambergris Caye Lodging Inventory


For lodging, as a point of reference, Ambergris Caye saw -2% in Q3 2022, -1% in Q4 2022, and -5% in Q1 2023. Over the last 3-years, Ambergris Caye lodging saw a decrease of 20% in inventory though tourism has increased by 14.6% annually. So compounded tourism growth over 13 years at an average of 14.6%.

As you can see, the 3-year trend has been consistent with many quarters seeing a dip in rental inventory (even with an increase in demand). This creates a unique opportunity for investors. With the shortage in supply and increase in demand, there is a need for more lodging and rentals.

Belize has a unique offering when it comes to real estate investment. We have a market that is not overly leveraged (due to a lack of traditional bank financing), and we are a growing destination that produces cash flow and can quickly adjust. The lack of inventory of rentals and resale properties creates a unique opportunity. If you combine that with the fact we are not as susceptible to real estate bubbles (due to most real estate being owned outright with cash) we are one of the most well-positioned markets.

 

Why Belize?

  • Low Carrying & Holding Cost.
  • With Fee-Simple Title You Own the Property Outright as a Tangible Asset.
  • Belize is a Tax Haven.
  • An Appreciating Asset in a Desirable Destination.
  • Primarily Cash Market Making Les Susceptible to Real Estate Bubbles.
  • Growing Demand with Limited Supply

It is also important to note that you own a tangible asset when you buy a property in Belize. Belize has full foreign ownership with the ability to own a property with a fee-simple land title (outright ownership). Unlike stocks, bonds, or cryptocurrency; if the value goes down (or even has no value/defaults), you still own a tangible asset in Belize that you are in control of and can use. Belize is also a tax haven, and property taxes are very low, which means the cost of ownership is next to nothing.

 

Benefits of Off-Shore Investing in Belize

  1. Diversification: It is always important to diversify investment, but that is even more true during economically challenging times. Diversifying across asset types, markets, and even currencies is essential for wealth preservation and hedging your investment. Diversification into a hard asset like real estate protects your investment and hedges against the stock market’s volatility.
  2. Find Deals in an Unsaturated Market: Belize does not have a formal MLS. Though this makes the property search process more difficult (and a realtor almost essential) it also creates opportunities. As a reactive market, you can find great deals that fly below the radar. By expanding your reach and your investment in an emerging market (like Belize), investors can broaden their opportunities and find diamonds in the rough, and undervalued assets.
  3. Less Saturation & Competition: A relatively new market, like Belize, has less competition. One reason I love Belize is the fact you don’t have to be a genius to be successful. There is a very low level of competition (in almost all industries in Belize) which allows an investor to take success from more competitive markets. Real estate in Belize is a tangible offshore asset that can help shield an investor from the volatility of market swings.
  4. Bigger Upside: Growth in offshore emerging markets has the potential to outpace growth in developed economies like the US, where populations are getting older and growing slowly.
  5. Taxation: Property taxes are low (almost nothing). For property around Secret Beach, for example, the property taxes are $75 to $90 per year. Canal-front homes in Mahogany Bay have property taxes of roughly $108 per year. Belize has a corporate tax rate of 1.75% (offshore) to 3% (domestic). With no capital gains tax and no estate tax.
  6. Residency: Property ownership can grant residency. In Belize, you can qualify for an “Investment Residency” through real estate investment. With the state of the current market, Belize can provide a safe haven for those hoping to escape the current state of uncertainty. Through the residency, you can protect your current assets and help secure your future.

Learn more about investing off-shore and tips for doing so.

People assume that real estate values in the US reflect the global market; when in reality, there are many markets that thrive during inflation and a recession. Generally, when people lose in the domestic markets, they look to alternative investments (like Belize). When money leaves one country for another, it is an “Exodus of Capital”. When investors lose trust in domestic systems and institutions they often look for tangible assets offshore. It is also important to note that Belize is also predominantly a cash market, because of this, we don’t have overlending and real estate bubbles. Right now, Belize is not only seeing tourism growth but also experiencing an influx of expats looking to relocate, this is an “Exodus of People”. When a population is experiencing a growth of high net-worth individuals, you see even higher property appreciation. As economies expand, and people relocate or reallocate, the demand for real estate drives rents higher. When you have a combination of residents looking for rentals combined with the vacation rental market, you have a favorable real estate investment.

The global inflation rate is why so many people are investing even more in Belize real estate. The reason they are doubling down on Belize real estate when inflation is on the rise is that you have an asset hedged against inflation, in a market that is not as susceptible to bubbles (due to lack of over-leveraged real estate), with a low-cost of ownership.

In 2009 RE/MAX in Belize had more transactions than any year prior. At this time, the US had the subprime mortgage crisis and global economies saw a downturn. When inflation comes, there is more money in circulation, the money does not “go away” it is often just reallocated. Diversifying your portfolio is always recommended, and there are a lot of opportunities off-shore in markets like Belize. History has a tendency to repeat itself, and if history is any indication of what will happen, Belize is sure to see more real estate transactions and be a great investment vehicle for years to come.

During economically slow times, many investors look at tangible assets like real estate and gold. During periods of uncertainty and economic stress, it is important to look at getting not only a Return on Investment but also a Return of investment.

Property in Belize is a cost-effective way to get both. Ambergris Caye Real Estate provides investors a means to own a finite commodity that is a tangible real asset with future demand. We often like to view Belize real estate as counter-cyclical, when other markets go down, Belize generally stays stagnant or increases.

If you are looking to learn more about the Belize market and investment opportunities in Belize let us know! Our team and RE/MAX Belize look forward to chatting with you.

 

 

Buying Real Estate in Belize Process

Belize Real Estate

Buying Belize Real Estate is very easy and the process is much like in North America (USA & Canada). Belize is one of the few countries in Central America & the Caribbean where foreigners enjoy the same property ownership right as nationals in land ownership and tenure. When a foreigner buys property in Belize, they own it outright with a fee-simple land title. The preferred practice of owning Belize real estate is through a fee-simple title which is clear title freehold ownership.

Foreigners can own property in Belize as an individual or through a Belize Chapter 250 (Limited Liability Company) or with an International Business Company (IBC). A property (like Belize land) will have a title that would be issued by the lands department. Condominiums in Belize are purchased through a “Strata” title or co-op share ownership. There are a few types of property ownership in Belize and it is important to learn the differences.

 

Belize Real Estate Purchasing Process

The property purchasing process in Belize is similar to Canada or the US (countries with fee-simple titles). Before you purchase property in Belize or buy Belize real estate it is important to know and understand the process.

 

Belize Property Search

Before buying in Belize, make sure you know the area that is best suited for you, your lifestyle, and your investment goals. Check out the different areas and districts in Belize; Ambergris Caye, San Pedro, Caye Caulker, Cayo, Placencia, etc. Belize has a robust landscape from the island beaches of Ambergris Caye to the jungle mountains of San Ignacio. When searching for Belize property, decide what is most important to you; the beach, mountains, inland, river, etc.

Ambergris Caye real estate is popular due to the fact that the island and San Pedro Town is the country’s most popular destination with the highest level of growth. Let the Remax Belize team help you with your Belize property & Belize real estate search. We can help go over the different options and opportunities available in Belize.

There are a lot of opportunities in Belize and a diverse real estate market. In Belize, we do not have a formal MLS, so a real estate agent’s job is a little different. If you are looking at buying or investing in Belize, a Remax Belize real estate agent can help with the search.

 

Offer to Purchase Belize Property

After the Belize real estate search, and once you find the property you want to purchase, the next step is to put in an offer or draft up an agreement of sale. The real estate agent will require your full name and address to be able to draft up the agreement/offer.

Most real estate transactions in Belize are cash sales. That said, there are opportunities with financing available. Most real estate opportunities in Belize with financing available are through seller or vendor financing. Belize does not have the standard bank financing or mortgages people are used to in the US or Canada. If you are wanting to purchase Belize real estate with financing, talk to your agent and find opportunities with financing. Or include the financing terms in the offer/agreement.

When writing an offer or agreement, make sure you add any contingencies, clauses, or addendums you require. Or include details required for the closing and include any additional services needed for the property transaction to go through.

In Belize, we do not have traditional home Inspectors or property appraisals. If required, you can an hire engineer or trusted home builders to inspect the property of interest and write up a report. If you are purchasing raw land, you can request a copy of the land title and/or a property survey.

You are also able to purchase Belize real estate through a Self-Directed IRA or 401K. Be sure to let your RE/MAX Belize real estate agent know if you want to use a Self-Directed IRA or 401K when you are purchasing the property. After the agreement is signed by the purchaser and the seller, a color copy of your passport will be needed as well as a utility bill matching the address on the offer to purchase.

 

Escrow Down Payment or Deposit

If you are purchasing a property with financing, you will have to send the down payment to an escrow account or escrow agent. Even cash sale transactions it is suggested to use an escrow account and closing company.

After all the documentation is signed, everything will go to a Closing Company for the due diligence and transfer of property. When buying any property in Belize you want to ensure the process is done correctly. That includes initiating a title search and ensuring there are no liens or encumbrances on the property. When buying Belize real estate you also want to make sure that the seller is legally able to sell the Belie land.

The property history as well as corporate and IBC registration is also something that the Closing Company will take care of. A Closing Company will make sure past transfers of ownership were done properly and that the whole process is done correctly.

You also want the Closing Company to look over the proposed purchase agreement, making sure the information is correct and ensuring it’s in full compliance with the local and governing laws of Belize. A Closing Company is particularly important if you are choosing to finance a property with the seller because a payment processing company is often needed.

It is also common in Belize for a closing company to use an Escrow Agent and/or Escrow Account. This helps to protect the buyer and the seller during the real estate transaction. Since most real estate transactions in Belize are done in USD it is common for the Escrow Account to be in the US and with a US Bank account.

Real estate transactions in Belize are in US dollars and use a US escrow agent or account (a US account or US intermediary is needed for any transaction in USD). The closing costs are paid by the buyer. The seller is responsible for the real estate fee and commission. All money is sent to a US escrow and a closing company releases funds upon closing.

When an offer or sales agreement is submitted a down payment for escrow is required. If it’s a cash sale, it will be the entire balance on the property which will go to escrow during the closing process. If it is a financing agreement, the down payment (20% to 25%) will be sent to escrow during the closing process.

The closing costs are between 1% – 1.5% of the sales price. Due diligence consists of a title search and a company search if the property is in a company name. This is all handled by the Closing Company.

 

Property Closing & Transfer

Once all the legal processes and closing have been completed along with a title search and closing documents. The legal documents are signed by all parties and original copies are sent to the purchaser. With a financing agreement, the seller will carry the note on the property (similar to a bank in the US). If it is a cash sale agreement, all original documents will be sent to the purchaser (the new owner of the property).

If the property is not in an IBC there is a one-time Stamp Duty Fee of 8% paid to the Government of Belize (GOB). Stamp/Transfer Tax is a tax of 8% on the total sale price and the Government of Belize gives you the first $10,000.00 USD exemption. GOB reserves the right to reassess the Stamp Tax and if they feel you paid too little for the Belize property, if this is the case the purchaser will require you to pay the difference.

If a property is held in a corporate entity like an IBC all the shares will be transferred to the purchaser. IBC property ownership means there is no stamp/transfer tax and the transfer of ownership is much faster.

To learn more about the closing process for land and properties held in an IBC vs not in an IBC contact us at RE/MAX Belize. In Belize, you own a property outright with a fee-simple title. Foreigners have the same ownership rights as locals.

 

If you are interested in Belize property and/or buying Belize real estate, contact us at RE/MAX Belize! We are here to help with your Belize real estate search. We can help find your dream home in paradise or investment property in Belize!