Grenada’s property market recovering slowly
Last Updated: August 22, 2015
Residential property prices in Grenada have been stable in recent months. In prime residential areas, condominium units are typically priced from $300 to $500 per square foot (sq. ft.) while the average price of houses ranges from $200 to $500 per sq. ft., according to Hyacyinth McBarnette of Re/Max Grenada.
The prices of developments in some of Grenada’s luxurious residential areas ranges from $460 to $1,600 per sq. ft.
At the luxurious Bacolet Bay resort in St. David on the south coast, a hotel cottage is priced at $430,000 while a two-bedroom apartment is being sold at $575,000. On the other hand, the average price of one-bedroom villas is $605,000, with a price of $1,062,500 for two-bedroom villas.
Foreigners can buy land. Non-nationals must pay the Alien Land Holding Tax at 10% of the property's value to buy an Alien Land Holding License.
Yields are lowish in Grenada
In general, yields are around 4.3% for properties in Grenada’s coastal areas, the center of the rental market.
An average 200 sq. m. house bought at around US$600,000 can be leased for approximately US$2,500 a month. This would generate an income of US$30,000, 4.8% of the property's value.
Bigger properties produce lower yields.
Rents in the islands are predominantly seasonal but this figure is for long-term leases.
Income tax is moderate in Grenada
Rental Income: Gross rental income is taxed at a flat rate of 15%, withheld by the tenant.
Capital Gains: There are no taxes on capital gains.
Inheritance: There are no inheritance taxes in Grenada.
Residents: Residents are taxed at a flat rate of 30% on their income.
Very high buying costs in Grenada
Roundtrip transaction costs for foreigners are between 32% and 43% of property value, the highest in the Caribbean. The Alien Land Holding License costs 10% of property value. Foreign buyers must also pay Property Transfer Tax, at 10%. In addition, non-national sellers also pay Property Transfer Tax at 15%, on top of the buyer’s payment. Grenada citizens selling property only pay 5% Transfer Tax.
Grenada's law is neutral between landlord and tenant
Rent: Rents and rent increases can be freely negotiated, but rent increases can be reviewed under the Rent Restriction Act.
Tenant Security: The landlord must give notice terminating the rental agreement before repossessing the property. It takes an average of 180 days to evict a tenant.
The spice of the CaribbeanThe Spice Island Grenada (pop. 106,000), earned its moniker because of the abundant spice trees in the country. The island breeze is filled with scents of nutmeg, cinnamon, vanilla, and ginger, and produces one-third of the world’s supply of nutmeg. Grenada also exports cocoa, banana, and sugar. Grenada's GDP per capita was around US$8,125 in 2014, according to the IMF.
The small country of Grenada is a tri-island nation composed of Grenada, Carriacou, and Petite Martinique. Grenada brims with gorgeous beaches, with both black and sugar-fine white sand. Divers savour elegant coral reefs and the largest shipwreck in the Caribbean, and a breathtaking underwater volcano.
Grenada was once one of the Caribbean's fastest developing economies. Its GDP grew by 8% p.a. 1997-2000. But partly as a consequence of 9/11, the economy contracted by 2% in 2001 and grew by a modest 3.4% in 2002. Economic growth has been erratic since then. After expanding by a spectacular 9.5% in 2003, the economy contracted 0.65% in 2004, mainly due to Hurricane Ivan.
GDP fell by an annual average of 0.7% annually from 2008 to 2013, due to the adverse impact of the global economic and financial crisis. Real GDP growth rose to 1.5% in 2014.
The good news is that Grenada’s fiscal performance has been stronger than anticipated. The deficit fell to just 1% in 2014 from 4% in the previous year.
To buoy the economy, the government entered into a three-year US$21.7 million extended credit facility arrangement with the IMF in June 2014.
Grenada’s economy is expected to expand by 1.8% this year, from an earlier estimate of 1.1%, according to the IMF. However while the economic outlook has improved, it will still be below potential over the next two years, as private and public balance sheets are repaired, said the IMF.
Grenada's currency is the East Caribbean dollar (XCD), which has been pegged to the US dollar at 2.7CD since 2001.