Buying Your Own Piece of Paradise
So what happens when you get your first glance of Grace Bay Beach and you want to stay? Well, the Turks and Caicos make it easy for you. Almost everything seems to be for sale here; chances are the condo where you're staying is for sale or that there's another just like it on the market. Adding to the temptation is that the only taxes property owners pay is a onetime stamp-duty tax paid during the transfer of land. Currently Provo charges 9.75%, although half-off tax specials have been known to happen. On the outer islands the tax is even lower, from 3% to 5%. After you pay the stamp-duty tax, you never have to pay property taxes again, even if you rent out your unit.
Unfortunately, many people come down on vacation, fall in love with the beach, and buy property before thinking about the long-term implications. As tempting as it may be, it's also important to be smart. Ask yourself the following: Can I rent this on my own, or do I have to put it in the management pool? What are the costs of maintenance, hurricane insurance, bug spraying, and travel-agent fees? What is the rental split with the management company? Can the resort decide to upgrade the unit or make other changes and send me the bill?
The best advice anyone can give is that you should buy a place because you love it, not just for the investment. After all, your "investment" may not end up being a capital gain; in other words, you may very well only break even by renting out your property and make a profit only if you can resell. (And although property in the Turks and Caicos is much more expensive today than it was a decade ago, there's no guarantee that property values will go up over the long term.)
One final piece of advice: Remember that you're placing your money in a foreign country, so always hire a local lawyer.
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