The Cayman Islands Government has good news for those Caymanians looking to buy their first homes in the Cayman Islands. The changes to stamp duty in The Stamp Duty (Amendment) Bill 2018 (‘Bill’) propose significant increases in the thresholds for stamp duty concessions to help ease the financial burden on first-time Caymanian property buyers.

If the Bill is passed without amendment, Caymanians will be able to take advantage of these new concessions from 1 January 2019.

Stamp duty on real estate purchases

Generally, when purchasing real estate in the Cayman Islands you can expect to pay stamp duty at a rate of 7.5% of the value of the property. For Caymanians purchasing their first home, there are already stamp duty concessions available, but the new Bill proposes significant increases in the threshold before stamp duty is payable. It also increases the availability of discounted stamp duty rates for lower value properties and introduces concessions for groups of Caymanians who wish to purchase a property together.

What are the threshold increases for Caymanian first-time buyers?

No stamp duty (0%)

At present no stamp duty is payable by Caymanian first-time buyers on the purchase of:

  • their first home with a value of CI$300,000 or less; or
  • undeveloped ‘raw’ land with a value of CI$100,000 or less.

Assuming the Bill passes without amendment, the proposed law will increase these thresholds and remove the requirement that the buyer live in the property, so that no stamp duty is payable by Caymanian first-time buyers on the purchase of:

  • land and buildings (whether established or part of a to-be-constructed development) with a value of CI$400,000 or less; or
  • raw land with a value of CI$150,000 or less.

Discounted stamp duty (2%)

At present Caymanian first-time buyers pay stamp duty at a discounted rate of 2% on:

  • their first home with a value over CI$300,000 but not greater than CI$400,000; or
  • raw land with a value over CI$100,000 but not greater than CI$150,000.

Under the proposed law, Caymanians making their first property purchase (whether or not they intend to live in the property) will pay stamp duty at a rate of only 2% on the purchase of:

  • land and buildings (whether established or part of a to-be-constructed development) with a value over CI$400,000 but not greater than CI$500,000; or
  • raw land with a value over CI$150,000 but not greater than CI$200,000.

What concessions are proposed for group purchases?

The Bill also proposes concessions where two or more Caymanians (but not more than 10) buy property for the first time. Under the proposed law, the rate of concessions is again linked to the value of the property.

No stamp duty (0%)

Eligible groups of Caymanian first-time buyers will pay no stamp duty on the purchase of:

  • land and buildings (whether established or part of a to-be-constructed development) with a value of CI$500,000 or less; or
  • raw land with a value of CI$300,000 or less.

Discounted stamp duty (2%)

For eligible groups of Caymanian first-time buyers, stamp duty will be payable at 2% on the purchase of:

  • land and buildings (whether established or part of a to-be-constructed development) with a value over CI$500,000 but not greater than $600,000;
  • raw land with a value over CI$300,000 but not greater than CI$350,000.

Solomon Harris

Whether you are interested in buying property in the Cayman Islands or looking for advice on how the changes to linked property transactions will affect your development, Solomon Harris has many years’ experience in all legal matters on the purchase of property in the Cayman Islands. Contact Partner Ian Jamieson or our experienced attorneys, Richard Parry and Sophie Warburton, to see how we can help.

Disclaimer
The information contained in this article is necessarily brief and general in nature and does not constitute legal advice. Appropriate legal or other professional advice should be sought for any specific matter.

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Cayman Stamp Duty Bill extends concessions for Caymanian first time buyers...

The Cayman Islands Government has good news for those Caymanians looking to buy their firs...


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