As published in the Cayman Financial Review – April 7, 2014
The Cayman Islands has always been an excellent market for real estate investment for overseas investors, with its close proximity to the United States, and offering stability and security as a British Overseas Territory, a plethora of sunshine all year round and an excellent selection of beautiful properties for purchase with no restrictions and no annual property tax.
Recent improvements to the islands’ infrastructure, however, have helped to enhance the attraction of this jurisdiction even further, making it one of the most highly sought after locations for overseas investors within the region when it comes to buying real estate.
From an investment perspective, Cayman Islands real estate has always made sense. With no annual property taxes, inheritance or capital gains taxes, the islands offer incentives to purchase real estate that few other locations can offer.
In the United States, for example, property tax is charged annually, whereas in the Cayman Islands a one-off stamp duty of 7.5 percent, charged at the time of purchase is the only government duty charged for the time that one owns the property, making it a financially sound option, particularly if you intend to own the property for a good many years, thereby spanning this cost over a longer period of time.
In addition, there are no restrictions on property ownership, unlike competitor jurisdictions such as Bermuda, which has a two-tiered property ownership system that makes it virtually impossible for non-Bermudians to own property, without a good many million in the bank, at least. Also, unlike Bermuda, the Cayman Islands government does not charge the purchaser a significant fee to obtain a license to purchase property from a local. Overseas buyers are free to purchase property or land in the Cayman Islands just the same way as a local resident, from whoever owns it.
Increased competitive advantage
Over the last few months the Cayman Islands has seen significant developments throughout the islands that have greatly increased the jurisdiction’s competitive advantage over similar offshore centers.
With regard to telecommunications, both of the major service providers, LIME and Digicel, have recently been busy installing enhancements to their networks that will make the Cayman Islands the envy of many the world over, investing tens of millions of dollars in 4G capabilities across the Islands and a fiber-optic network that will allow for ultra-high speed internet.
This will in turn benefit not only residents in terms of connectivity, but businesses will also benefit as well, as healthcare, tourism and the financial services industries become further digitally advanced, outpacing regional competitors by a mile.
A new road network linking the district of West Bay with the capital district George Town means residents can be in the capital and so at their place of work in super quick time. Further roads are currently being designed to bring the same convenience to the east of the island. This is a vital enhancement that will help to further ease transportation from and to Cayman’s brand new hospital, Health City Cayman Islands, and other new tourist developments on the Eastern end of Grand Cayman with the airport that is located in George Town.
Development furthers the economy
Health City is an exciting new development opened in 2014, a 140-bed tertiary-care hospital that is a center of excellence in cardiac surgery, cardiology and orthopedics. Geared towards medical tourists arriving from overseas, Health City is a multi-phased project that will take years to complete and will eventually be one of the biggest healthcare complexes in the western hemisphere. It has the ability to positively impact Cayman’s economy like few other projects, such is its potential.
To complement the new hospital complex, the development of a brand new community named Ironwood (named after a tree indigenous to the Cayman Islands) is underway, a $300 million development that will be made up of a town center, championship golf course designed by golfing legend Arnold Palmer and residential communities situated in the districts of North Side and East End.
To enhance Cayman’s tourism product even further, two new hotels are also set to be constructed in the medium term. The Kimpton Hotel is scheduled to open in 2016 owned by Dart, the first Kimpton Hotel in the Caribbean, and a US$200 million dollar investment on Cayman’s famous Seven Mile Beach, with 265 rooms, 61 residences and six beachfront bungalows.
In addition, the old Hyatt Hotel is also set to be replaced with a European-style hotel that will be a new brand for the Island, thereby encouraging a new demographic of tourists to Cayman’s shores.
In conjunction with the growth and development of Cayman’s infrastructure, the ultra-luxurious residential market has also seen tremendous growth in recent months, a great deal due to the WaterColours development currently almost nearing completion on Seven Mile Beach, the only new residential construction on this highly sought-after precious strip of prime land.
This collection of 60 sumptuous residences is located on one of the most prestigious locations within the Caribbean and offers residents all the amenities, luxuries and convenience of a property in this class.
A selection of exclusive ultra-high end waterfront homes are also on the market, commanding premium prices, offering buyers the seclusion, comfort and elegance they would expect of similar properties located in their home countries.
Well-informed investors have always appreciated all that the Cayman Islands has to offer in terms of real estate investment. Substantial new developments will no doubt encourage even more overseas investors to make the right choice and choose Cayman as their second home.