Unlocking Paradise: A Guide to Real Estate Buying in The Cayman Islands

Have you ever dreamt of waking up to the gentle sound of waves lapping against the shore, surrounded by pristine beaches and vibrant tropical landscapes? If so, then the Cayman Islands might just be your slice of paradise. Nestled in the heart of the Caribbean, the Cayman Islands offer a unique blend of luxury living, natural beauty, and endless opportunities for adventure. And if you’ve been contemplating making this dream a reality by purchasing property in the Cayman Islands, you’re in luck! Let our team at Momentum Realty guide you through the exhilarating journey of unlocking your key to paradise.

Understanding the Local Legal Landscape

Before diving headfirst into the real estate market in the Cayman Islands, it’s crucial to familiarize yourself with Cayman Islands law governing property ownership. Fortunately, the Cayman Islands boast a transparent and investor friendly legal framework, making it relatively straightforward for foreigners to purchase real estate. Non residents can freely buy property on island, whether it’s a condominium, single family home, or a plot of land.

Additionally, the Cayman Islands government imposes no property (apart from a one-off stamp duty at time of purchase), income, or capital gains taxes, making it an attractive destination for international investors seeking tax-efficient investments. However, it’s essential to consult with legal and financial experts familiar with the local laws to ensure compliance with all relevant legal requirements and to navigate any potential complexities smoothly.

Understanding Down Payments

In the Cayman Islands, as in many parts of the world, when seeking a mortgage, the amount of the down payment required can vary depending on several factors, including the type of property, whether the mortgage is for a residential or an investment property, the lender’s requirements, and the buyer’s financial profile.

Typically, down payments in the Cayman Islands range from 10% to 20% of the property’s purchase price. However, for mortgages for investment property or second homes, the down payment requirements may be higher, often around 20% to 30% of the purchase price. It’s essential to note that these figures may vary depending on a number of factors, and prospective buyers should consult with local real estate professionals and financial advisors to get up-to-date information.

Understanding Stamp Duty

In the Cayman Islands, there is a one-time stamp duty fee which is payable by the purchaser to the Government on any property purchase, which is 7.5% of the property’s fair market value or purchase price (whichever is higher).  In addition to a down payment, prospective purchasers should aim to have savings of around 10% of the property’s value to cover the cost of stamp duty and other closing costs such as attorneys’ fees, and an additional 1-1.5% stamp duty for registration of a mortgage.

For first or second time Caymanian home buyers, the Cayman Islands government has recently introduced substantial changes to stamp duty waivers, which make this step substantially easier. 

Steps to Unlocking Your Key to Paradise

1. Determine Your Budget: Before diving into the home buying process, assess your financial situation and determine how much you can afford to spend on a property. Consider factors such as your income, savings, and existing debt obligations. Typically, most Cayman lenders will only provide approval for residential mortgages where your monthly expenses (together with the anticipated loan) do not exceed 40-50% of your monthly income (known in industry terms as a ‘debt to service’ ratio’). Accordingly, you should aim to purchase a property which would have a mortgage which does not exceed this amount when combined with your other expenses. Fortunately Momentum Realty has a Mortgage Calculator which is easily accessible on our ‘Resources Page’. 
2. Work with a Local Real Estate Agent: With your budget in mind, you can begin exploring properties that align with your preferences and financial capabilities. Whether you’re interested in beachfront condos, single family homes, or investment properties, the Cayman Islands offer a diverse range of real estate options to suit various tastes and budgets. Partnering with a knowledgeable real estate agent who specializes in the local market can streamline your home search process. Throughout this process, our dedicated team at Momentum Realty will provide invaluable support and guidance, ensuring a seamless transaction from start to finish. From coordinating property inspections to liaising with legal professionals and facilitating the closing process, we’ll handle all the details, allowing you to focus on envisioning your life in paradise.
3. Make an Offer: Once you’ve found a property that meets your criteria, work with your real estate agent to submit a purchase offer. Your offer should include the proposed purchase price, any contingencies, and the desired closing timeline. Typically, contingencies include obtaining approval for a mortgage amongst other things and conducting due diligence.
4. Get Approved for a Mortgage: If you require financing, obtaining approval for a mortgage is a crucial step. This process involves a lender evaluating your financial information to determine the loan amount you qualify for, based on the intended property purchase.
5. Conduct Due Diligence: Upon acceptance of your offer, conduct thorough due diligence on the property. This may involve inspections, title searches, and reviewing any applicable strata or homeowner association documents to ensure there are no issues that could affect the sale. Typically, your lender will seek to agree with you to instruct a reputable Cayman Islands law firm to carry out such due diligence and attend to any paperwork. Typically, such costs are in the region of CI$1500-3000, although certain firms may charge higher depending on the value of the property.
6. Finalize Financing & Close the Deal: If you’re securing financing, finalize your mortgage arrangements and ensure all necessary paperwork is in order. Once everything is in place, you’ll proceed to the closing, where ownership of the property is transferred, and the remaining funds, including the down payment, are paid.

Connect Today!

Owning a piece of paradise in the Cayman Islands is more attainable than ever before. Whether you’re seeking a vacation home, investment property, or permanent residence, our team is dedicated to helping you unlock the door to your dreams of island living.

And with Momentum Realty by your side, you can rest assured knowing that you have a trusted partner committed to ensuring your continued satisfaction and success as a property owner. From property management services to rental assistance and beyond, we’re here to support you every step of the way on your journey to island living.

So why wait? Take the first step towards your Caribbean oasis today and let Momentum Realty be your trusted partner in the exciting journey of real estate buying in the Cayman Islands. Your piece of paradise awaits!

Reach out to Gabriella Agostinelli at Momentum Realty via email at [email protected] or connect via phone/WhatsApp at +1 (345) 322-7741. Your journey to unparalleled real estate opportunities begins now.

This article is for general informational purposes only and should not be construed as legal advice.