by Shawn Cumberbatch
Economic hard times or not, foreign millionaires are lining up to purchase upscale homes in Barbados.
And John Morphet, the English billionaire who owns local golf and residential development Royal Westmoreland, thinks a major part of the attraction is Government’s decision to introduce measures to attract “high net worth individuals” to the island.
In the last six months the St. James development has had a 40 per cent increase in “enquiries” from people looking to buy its homes worth between $2 million and $8 million, he reported.
The head of the United Kingdom’s Pure Leisure Group also said while some “speculative developments” which were “poorly funded” had been wiped out by the recession, “the ones left such as Royal Westmoreland are attracting a lot of interest”.
“If you are a tax resident in Barbados you can claim a tax credit on income from foreign sources transferred to Barbados through the banking system of up to 93 per cent of the tax. This translates to an effective tax rate of 2.45 per cent for an individual whose income is solely from foreign sources. In addition, there is no capital gains tax in Barbados,” the investor, who has plans for a second golf and residential project at Lancaster Plantation, said.
“With all the austerity measures and extra taxes being placed on individuals in Europe, it’s no surprise that this is proving to be attractive. We have seen evidence of this ourselves at Royal Westmoreland, having had a 40 per cent increase in enquiries in the last six months from buyers looking for properties in the US$1 million to US$4 million price bracket.
“Typically our buyers are looking to buy for lifestyle reasons but they also like the fact that Barbados offers a tax-efficient environment and is politically stable. The new residency rules will be particularly attractive for those buyers with a primary residence in a high tax region.” Morphet said Barbados remained a destination of choice for Brits for a number of reasons including “the fantastic climate, beautiful beaches and the excellent quality of living”.
“Despite the world-wide recession Knight Frank in their 2013 Caribbean Insight Report claim that the Caribbean, and especially Barbados, is bucking the trend and with a surge in enquiries for property in 2013 of 57 per cent compared to 2012,” he noted.
“Part of the reason maybe because the government of Barbados, keen to attract further investment, has adjusted residency rules to allow high net worth individuals with assets of US$5 million/3.45 million or more to gain an ‘indefinite special residency permit’.
“This came into play in June 2012 and is attractive because it makes it very tax efficient for those residing on the island that earn their money elsewhere. Royal Westmoreland is a mature gated community, different to many other developments on island, and prices have continued to rise despite worldwide financial prudence. We are seeing prices elsewhere on island stabilise now and even start to grow again,” he added.
Morphet said aisle from economics reasons British buyers were attracted to real estate here because they “feel comfortable in Barbados due to its familiarity and long standing links with Britain”.
“The UK ruled Barbados for 350 years and is still a member of the British Commonwealth. Our owners like the fact they can drive on the left, enjoy world-class restaurants and the friendly and endearing personalities of the locals,” the entrepreneur stated. firstname.lastname@example.org