As published in the Cayman Compass: WEDNESDAY JANUARY 17, 2015
Photo from yabsta.ky : The more children enrolled in schools, the better able schools are to attract and retain good teachers, increase curriculum offerings, thus making the schools and the island as a whole a more attractive place to live and raise children.
Although this is my January update I’m writing this just before Christmas, a time that is particularly important for families, as we all join together to enjoy the festive season. With this in mind, I was therefore galvanised to think about this jurisdiction as it relates to families, and all that it offers families who choose to settle here.
The Cayman Islands is a brilliant place for anyone to move to, but it is especially fantastic for families. I grew up in Cayman and knew it was a place that I wanted my own family to enjoy living in one day. Cayman is multi-cultural and laid back, both excellent and unique plus points, and it also attracts a particular kind of educated and savvy immigrant who knows that there are few places better on earth in which to live.
With respect to what causes an increase in immigration to the Cayman Islands and an increase in real estate investment here, in my view there are two main factors; the first being changes in Cayman’s immigration policies and the second being the introduction of a new hotel.
PR penalizes families
It should be noted that any improvement to Cayman’s immigration system always has a positive effect on our real estate industry. I believe Cayman’s immigration system needs to be made a priority by government because families and individuals alike are having to wait far too long to hear if they have been granted the right to reside here. But, while this is my industry, it’s not just our business that is impacted by immigration. The community as a whole improves when families are attracted to live here. They become a huge asset to the country and encourage Cayman to shine. We therefore need to make it easier for such people to come and live here so they can make their own contributions to the country.
While there are some who may be against allowing people to immigrate to Cayman, let’s face it, immigration is essential for the island’s tourism and financial sectors to continue thriving and also for cultural enrichment. Immigration policies are therefore essential to get right if we are to continue to retain and attract like-minded new residents and their families – good families who will positively contribute to island life, but Cayman’s permanent residency regulations are far from attractive to families. In order to gain the maximum 30 points to go towards a PR application (and thereby practically assure themselves of a residency grant), an individual must show they have met the prescribed equity investment relative to their income ratio i.e. the amount that they invest before any mortgage on the property. Yet immigrant families must put their children in private school (the free public school system reserved for Caymanians only.) With most private schools on island charging around CI$10,000 per year per child, this is a large outlay for anyone, but it also has the knock-on effect of reducing the amount of funds available to parents, should they choose to purchase a property and perhaps one day apply for PR. This means that anyone wanting to reside here for the long term is essentially penalised for having children.
I think this is wrong because families naturally contribute more to the economy and thus the country as a whole than single people, spending not only on school fees but many other necessities, such as food and utilities. Besides the bare necessities, keeping children entertained and occupied require significant budgets, creating a myriad of business and employment opportunities. These sporting and entertainment based businesses serve not only the residents of the Cayman Islands but also serve to attract more tourists visiting with their families. So keeping families resident on island has a knock on effect for the economy as a whole.
From a schooling perspective, the more children enrolled in schools, the better able are schools to attract and retain good teachers, increase curriculum offerings, making the schools and the island as a whole a more attractive place to live and raise children. I’m often asked by customers looking to invest here, customers from not only North America but as far away as China, about how it is to live and raise children here. So, why not give people who have children extra points when applying for their permanent residency application? Let’s reduce the risk involved with moving here and living here long term from the very people we want to attract, to help our country grow and prosper in the long term.
The second major influence affecting real estate investment here is when we see a new hotel offering. New hotels come along with their own following of clientele, exposing Cayman to a new batch of potential investors. History has shown that the three to five years following an introduction of a new hotel, real estate transactions and prices have increased, especially of tourism and investment property. One must also take into consideration the extensive spin-off to the local economy which caters to these tourists. When Cayman increases the number of overnight visitors, the economy does better, with a single overnight visitor bringing in twenty times the value of a cruise ship day visitor. It will be interesting to see the effect of the new Kimpton and re-build of the old Hyatt upon their completion.
While on the subject of family, another excellent reason for families to relocate or invest here is the fact that Cayman has no inheritance tax, which is of huge benefit to people who wish to pass on their homes as tangible assets to their children. In the UK and the US, this is a completely different picture, with the tax man taking around half of the already taxed capital assets of an individual upon their death and after just a small threshold, £325,000 in the UK. This means that a UK resident who inherits a home bought in the 1980s for, say, £250,000, now worth £2 million, has to pay a whopping £670,000 (40% of £2 million less £325 thousand) to the tax man on the property! Again, this is after the property was already purchased with taxed income and paid years of annual property taxes. Thankfully, the Cayman Islands has no such inheritance tax and people who reside here permanently who are not subject to tax laws elsewhere can be safe in the knowledge that they will be able to pass down their property to their children in their entirety. Another great reason for living in the Cayman Islands!