Belize’s thriving property market
Last Updated: August 02, 2015
However, realtors estimate that house prices declined by as much as 25% to 30% during the global economic crisis. The property rebounded strongly in 2012, and has continued to rise since then.
Outside interest in Belize expanded rapidly from 2000 to 2007, partly due to the passage of the Retired Person Incentive Act (RPIA) in September 1999, and to the tourism boom. Tourists flocked to Belize’s natural wonders - beautiful beaches and tropical forests, plus ancient Mayan temples. From 2003 to 2007, property prices in coastal and tourist areas rose by as much as 30% annually, while prices of inland properties rose by around 15% annually, according to local real estate agents.
Ambergris Caye and southern Belize – Placencia – continue to be the two most popular areas for foreign homebuyers, said Chebat. Ambergris Caye has the most expensive housing in Belize where tourists and expats are attracted of the beauty of the Barrier Reef. Oceanfront condominium units are priced at about US$500,000,
More reasonable house prices can be found in the south, especially in the Placencia Peninsula and nearby areas such as Sitee River, where residential properties are usually priced 40% lower than those on Ambergris Caye. A two-bedroom oceanfront condominium unit is priced between US$350,000 and US$450,000.
Moreover, some expats also choose to settle in areas close to the border with Mexico or Guatemala. Corozal Town in the north (bordering Mexico), and the Cayo District in the west (bordering Guatemala) are some of the popular places for expat retirees.
Most foreign buyers in Belize come from the United States. Direct flights to the island are available from numerous U.S. cities, including Houston, Chicago, Dallas, Miami, Charlotte, Atlanta, Los Angeles, and Newark. There is also a growing interest from Canadians, Britons, Italians and Russian investors.
Most property transactions are done in cash, as Belize’s banks charge high interest rates.
Property in Belize – Ambergris Caye prices stable
House prices in Ambergris Caye remain stable, with an average selling price of US$450,000. Last year houses sold for an average of US$ 420,000.
This year, included condos in our research. Condos in Ambergris Caye sell for US$2,660 to US$3,330 per square metre.
Belize has low income tax
Rental Income: Rental income is considered as business income, and is taxed gross at a flat rate of 3%.
Capital Gains: There is no capital gains tax in Belize.
Inheritance: There is no inheritance tax in Belize.
Residents: Residents are taxed at a flat rate of 25% on their employment income. Income from other sources is subject to business tax, wherein the applicable tax rate depends on the classification of the income.
Buying costs are moderate in Belize
Roundtrip transaction costs are around 14% to 19% of the property value. The stamp duty is 5% with the first BZD20,000 (US$10,100) tax-exempt. Real estate broker's commission is typically 6% to 7% for houses and 10% for land.
Sale of new properties is subject to 10% General Sales Tax.
Belize's rental law is pro-landlord
Rent: The initial rent can freely negotiated. The Rent Restriction Act, however, limits rent increases to 10% annually or at a level mandated by the district Rent Assessment Board.
Tenant Security: Non-payment of rent and sub-letting without the landlord’s knowledge are grounds for eviction. Landlords, through a court order, can forcibly enter to reclaim the property from tenants, and claim compensation for damages and unpaid rent.
Modest economic growthBelize is a low income country (GDP per capita of US$4,745 in 2014), and a high birth-rate. Tourism, fisheries, agriculture, and manufacturing dominate the economy.
In 2014, the economy grew by 3.6% from a year earlier, up from 1.5% in the previous year, according to the International Monetary Fund (IMF). In Q1 2015, Belize’s economy grew by a noteworthy 7%, a significant improvement from a growth of 1.6% in the previous quarter, and the highest growth since 2011. This was mainly fueled by growth in agriculture, manufacturing and tourism, according to the Statistical Institute of Belize.
Before experiencing recession in 2009, Belize’s economy has experienced strong growth since 1996, with 5.64% p.a. average GDP growth from 1997 to 2007.
In June 2015, Belize’s total imports rose by 20% to US$189.2 million from a year earlier. On the other hand, exports dropped 21% to US$52.6 million over the same period.
In 2014, the total number of stay-over visitor arrivals rose by 9.3% y-o-y to 297,527 persons while cruise passengers soared by 42.9% to 871,318 persons. However from January to April 2015, stay-over visitors in Belize dropped 1.3% to 120,024 persons from the same period last year, according to the Central Bank of Belize. In contrast, cruise passengers continued to rise by 4.9% y-o-y to 402,525 persons.
Unemployment was 12.9% in 2014, down from 14.1% in 2013, according to the IMF. Unemployment is expected to remain unchanged this year.
In June 2015 inflation was -0.8%.
Belize is a former British colony, and won full independence in 1981. In February 2008, the left-leaning United Democratic Party (UDP), which had led the country to independence, won the general election, unseating the centre-right People's United Party (PUP), which had been in power for 10 years and had been rocked by allegations of corruption. The UDP’s leader Dean Barrow is Belize’s first black prime minister.
In the latest May 2012 elections, Barrow retained his post as Belize’s Prime Minister, and his UDP party was re-elected. However, the UDP lost eight seats in the House of Representatives to the PUP, and now has only a one-seat majority.