'Citizenship by Investment Program' to boost the property market in Antigua and Barbuda
Last Updated: August 12, 2015
Moreover, the opening of a new airport terminal and the construction of several residential developments are attracting foreign homebuyers. The US$45 million Airport Terminal, at the VC Bird International Airport, is expected to be completed within six months, boosting the lucrative tourism and offshore financial services industry.
Antigua and Barbuda is known internationally as a luxury holiday and wedding destination, renowned for its tropical climate and its 365 beaches – one for every day of the year. With gorgeous views, landscape and good property values, it is an ideal location for a second home, attracting celebrities like Oprah Winfrey, Giorgio Armani, Richard Branson and Eric Clapton. It is also now being promoted for family-oriented vacations.
Some construction projects now underway:
- The US$2 billion Singulari development, Antigua and Barbuda’s first mega-resort, is expected to create 1,000 jobs in the country. This 1,600-acre multi-hotel, residential and commercial project is being lauded as a major feather in the country’s tourism cap. Singulari, which spans 900 acres of land in the north of Antigua and 700 acres of tiny islands, includes several luxury hotels, hundreds of private homes, a school, hospital, marinas, golf courses, an entertainment district, horse racing track and the Caribbean’s biggest casino;
- A US$250 million hotel project on Barbuda to be developed by Hollywood actor Robert De Niro;
- In 2013, the Bau Panel project was launched which consists of around 5,000 homes across Antigua and Barbuda and is expected to cost around US$200 million;
- The construction of a brand new Sandals Beaches Resort, Beaches Antigua, which will be built on the Grand Pineapple Resort, and;
- The construction of South Point, a boutique hotel to be situated in the Falmouth Harbour.
There are no official house price records in Antigua and Barbuda, and reliable information is hard to come by. But based on recent research by the Global Property Guide, not a lot has changed in recent years. Two-bedroom houses still average around US$350,000 while three-bedroom and up houses might cost about US$600,000.
During the boom years, house prices in Jumby Bay increased 60% to 100%, according to the Global Property Guide. However, the market was hit by the global financial crisis in 2008, halting the construction of several residential developments. Tourists stayed away – and since the nation’s economy is largely driven by tourism, real GDP went down and construction and foreign direct investment declined.
In 2014, the economy expanded by a modest 2.4%, after annual real GDP growth rates of 1.8% in 2013 and 3.6% in 2012, and y-o-y declines of 1.9% in 2011, 8.5% in 2010 and 10.7% in 2009, according to the International Monetary Fund (IMF). Economic growth is projected to be 1.9% this year and to 2.3% in 2016.
Antigua and Barbuda: rather expensive, and are low
Not a lot has changed in the housing market of Antigua and Barbuda over the past year, though there has been a cooling since the overheating of 2008, when Antigua and Barbuda seemed to be the new ‘in’ place.
2-bedroom houses still average around US$350,000. 3 bedroom and up might cost US$600,000.
Gross rental yields are low, averaging around 4%.
Antigua and Barbuda’s rental income tax is high
Rental Income: Net rental income is taxed at a flat rate of 20%, withheld by the tenant. Income-generating expenses and depreciation expenses are deductible from the gross rent to arrive at the taxable income.
Capital Gains: There are no capital gains taxes in Antigua and Barbuda.
Inheritance: There are no taxes on inheritance in the islands.
Residents: Residents are taxed on their worldwide income at progressive rates, from 8% to 25%.
Buying costs are high in Antigua and Barbuda
Roundtrip transaction costs are around 21% to 24% of the property value, inclusive of the agent’s commission (5% to 7%). The biggest chunk of the cost goes to stamp duty at 10% (7.5% paid by the seller and 2.5% paid by the buyer). The buyer also pays for the Alien Land Holding License (ALHL), which is 5% of the property value).
Tenancy protection laws
Short-term leases, a week’s time or so, are the most common tenancy agreements in Antigua and Barbuda.
Tourism-dependent economyAntigua and Barbuda’s economy largely depends on tourism which in turn is determined by economic trends and social trends of foreign markets. Weather conditions also directly affect the tourism industry and the country is very vulnerable to hurricanes. Tourism accounts for about 60% of GDP and 40% of investment in Antigua and Barbuda.
In 2014, the economy expanded by a modest 2.4%, after annual real GDP growth rates of 1.8% in 2013 and 3.6% in 2012, according to the International Monetary Fund (IMF). Economic growth is projected to slow slightly to 1.9% this year and to 2.3% in 2016.
Stay-over visitors rose by 2.5% in 2014, but this was balanced by a 1.5% y-o-y drop in cruise ship passengers, so that there was a 0.7% decline in total visitors to 799,661 persons. Visitors from the U.S. accounted for 38% of the total number of stay-over visitors in Antigua and Barbuda in 2014, followed by Britons (29%), and Canadians (11%).
In Q1 2015, total visitor arrivals were up by 11% to 405,670 persons from the same period last year.
From 2003 to 2007, the country’s GDP grew an average of 6% a year and reached over 12% in 2006, mainly due to a tourism and construction boom as the nation prepared to host the Cricket World Cup. However, during the global economic and financial crisis the economy contracted by a huge 10.7% in 2009, by 8.5% in 2010, and by another 1.9% in 2011.
For decades Antigua and Barbuda's politics were dominated by the Bird family. Vere Bird led the country into independence in 1981. He remained in office till 1994, when he was succeeded by his son, Lester, who then spent a decade in office. But behind this stability was a succession of scandals and allegations of corruption.
The opposition United Progressive Party led by Baldwin Spencer won a landslide victory in general elections in March 2004. A lifelong labour activist, Baldwin Spencer was born in the working-class community of Green Bay, and he promised that "crimes committed against the people" would not go unpunished. But to date the government has been clearly pro-business.
Spencer was succeeded by Gaston Browne, who took office on June 12, 2014. PM Browne vowed to transform the country into an economic powerhouse.