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Realtors’ and lawyers’ fees in Belize and other property purchase costs
Transaction Costs
Who Pays? / % / Sales Tax
9% / buyer /Stamp Duty
5% / buyer / Property Tax
1% - 1.5% / buyer /Agent's Fee
6% - 6% / buyer / Buyer's Legal Fees
1% - 3% / seller / Seller's Legal Fees
Costs paid by buyer: 16% - 18.5%
Costs paid by seller: 7% - 10%
Roundtrip transaction Costs
23% - 28.5%
Property purchase process in Belize
The first step to purchasing property in Belize is to hire an agent and a lawyer. It is very important to have legal representation because there is no regulation on the real estate industry in Belize. Agents are not required to have any certification or license. Moreover, real estate agents in Belize are not required by law to disclose valuable information about the property.
Be aware of “Deed Restrictions”. These are intrinsic to the property title, which means, while there are no restrictions mandated by law, there are restrictions that go with the property owner’s rights and obligations. These restrictions outline how the property can be used. The lawyer can be helpful in making sure the “Deed Restrictions” of a title are legal. Also, it is important to ascertain the property’s zoning. This specifies how high the dwelling/building must be, how many rooms it can contain, etc.
Once a property has been chosen, negotiate. Upon reaching an agreement, a 10% deposit must be paid, which takes the property off the market. It is the duty of the lawyer to ensure that a title for the property actually exists since there are unregistered properties in Belize.
The lawyer is responsible for performing due diligence. It is typical for the buyer and seller to have separate lawyers.
If the property is clear of any charges, proceed with the transaction. The seller will submit his title documents to his lawyer who will draft a new title in your name. Upon receipt of the new title, the lawyer will transfer the outstanding balance, which he will have already asked the buyer to pay to his escrow account, to the seller. He will then submit Transfer of Land forms to the Department of Lands and Surveys in Belmopan, where stamp duty of 15% will be payable (Belizean nationals pay only 5% for stamp duty). The new Land Certificate, in your name, should arrive within three weeks.
There is news that a new Goods and Services Tax (GST) will be in place. This will be levied at 10%. If this pushes through, it will be included in first-time property sales. The GST will likely replace the existing Sales Tax.
Inheritance
Inheritance from two angles: taxation, and what inheritance laws apply to foreigners leaving property in Belize: what restrictions there are and whether making a will is advisable.
Belize’s inheritance laws affect everyone who owns property in Belize.
Belize’s inheritance laws affect everyone who owns property in Belize. Foreign nationals are not treated differently to citizens of Belize. If a foreigner dies owning property in Belize, then the competent jurisdiction for administration of his/her estate is in Belize.
The Administration of Estates Act, Chapter 197 of the Laws of Belize regulates the administration of estates, whether the decease dies intestate, or with a will. The Supreme Court of Belize – Probate Side has jurisdiction over matters of inheritance. A grant of probate can usually be obtained within 2-3 months. The act allows the resealing of grants of probate obtained in any part of the British Commonwealth or a British Court of Probate in a foreign country. After the grant is obtained, an administrator appointed by the court cannot distribute the estate until a statutory notice to creditors has been published, and time has been afforded for claims to be made against the estate.
In Belize there is no precisely-defined reserved portion, but dependents can apply to the Supreme Court for relief.
A testator is free to leave any part of an estate to anyone he/she wishes in a will; however, the testator must make adequate provision for any dependents at the time of death.
If adequate provision is not made, the dependent person can apply to the Supreme Court for relief. The judge has the discretion to reserve a portion of the estate for persons not adequately provided for in the will; however the judge can only act in response to an application by a dependent. If, for whatever reason, someone is considered “unworthy” to receive a gift in a will (e.g. if the inheritor is accused of murdering the testator) the gift to the unworthy person fails, but the entire will is not invalidated.
In the case of intestacy, the table of distribution as set out in the Administration of Estates Act applies. Under this table, the rights of the surviving spouse and children are recognized first, then the parents, followed by parents, then sisters and brothers (whole blood ranking before half blood) .
It is normal for persons in Belize to make a will.
It is advisable for a foreigner who owns assets in Belize to make a will, in Belize, or elsewhere. As long as a foreign will satisfies the requirements of the laws of Belize, it does not need to be authenticated by authorities in Belize.
If the will is made in Belize, the formalities prescribed by the Wills Act must be followed. In addition to the presence of the testator in Belize, the following must be adhered to:
- The will must be in writing;
- The will must be signed at the foot or the end by the testator;
- The will must be signed by the testator in the presence of two or more witnesses, present at the same time;
- The witnesses must attest or subscribe the will in the presence of the testator; beneficiaries are not advised to subscribe as witnesses, since their gift will fail in that event.
To apply for probate or letter of administration in Belize, foreigners must give a power of attorney to a resident of Belize for that purpose. This process takes some time and property cannot be transferred or sold during this period.
Property can be given during the lifetime of the owner.
The owner of property has no restrictions with regard to transfer of property during his/her lifetime. As long as the legal title document bears the name of the transferor, this person can freely transfer his/her property, irrespective of marital status. In the absence of fraud, such transfer would not be subject to challenge.
The property owner is the person registered on the title deeds.
All transfers of property, whether by gift, inheritance, or sale must be recorded at the Lands Department in Belize.
The owner of property in Belize is the person so registered on the title deeds. If the deceased was married, and the surviving spouse is a joint owner by the title deed, then the registered spouse is the legal owner, and is able to sell or transfer the property to another person. There are certain instances, however, whereby the law recognizes ownership by actual possession rather than by title deeds.
The process for purchasing and registering property in Belize can be lengthy (sometimes 2-3 months). If a foreigner who buys property in Belize resides abroad, then it is advisable for him/her to retain an attorney in Belize. The attorney will ensure that the documents are recorded and processed as necessary on behalf of the foreigner.
Minors can inherit property.
The deceased has an option to appoint a guardian of his/her child or children in a will. In the absence of such an appointment, then the Administration of Estates Act is applied. A personal representative of the deceased may appoint two or more individuals (not exceeding four) to be the trustees of any benefit so conferred on a child or children.
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