Introduction

Property tax in the British Virgin Islands is quite low, relative to property-related taxes levied in many other countries. Having said that, interest on late payments can quickly accrue and where payments are missed over several years, it is not uncommon for the interest due on those missed payments to exceed the underlying property tax liability.

The BVI’s Inland Revenue Department does not issue property tax invoices or reminders and property owners must therefore remember to pay the required tax when it becomes due.

Download a PDF of our Guide to Property Tax.

The Period Covered

Property tax is payable on 1 September in each year and covers the calendar year in which the relevant payment falls due.

Property tax that falls due on 1 September in any given year therefore covers the period 1 January to 31 December in that year.

While property tax falls due annually on 1 September, property owners are allowed a grace period of three months to pay. This means that property owners will not be in arrears provided the applicable property tax is paid on or prior to 30 November in each calendar year. If the property tax remains unpaid after the three month grace period, interest at a rate of twenty per cent per annum on the amount payable and unpaid shall be charged and such additional sum shall be deemed to be part of, and shall be recoverable with the tax remaining payable and unpaid.

The Two Elements of Property Tax 

Property tax comprises the following two elements:

• A tax levied on every acre or part of an acre of land in the BVI (commonly referred to as land tax); and
• A tax levied on the assessed value of every house in the BVI (commonly referred to as house tax).

Note that the definition of “house” under the relevant legislation includes any kind of building. Property owners should therefore not fall under the mistaken belief that property tax applies in respect of residential properties only.

The element of property tax attributable to land is calculated at differing rates, determined by whether the land in question is owned by a British Virgin Islander, or an expatriate.

For the purposes of the relevant legislation and broadly speaking, a British Virgin Islander is: (i) a person who is deemed to belong to the BVI under the Immigration and Passport Act; and (ii) a BVI company that is owned and controlled by a British Virgin Islander.

The definition of an expatriate includes any person who is not a British Virgin Islander and any company that is not owned and controlled by a British Virgin Islander.

How Property Tax is Calculated 

The element of property tax attributable to land is chargeable at the following rates:

Where the land in question is owned by a British Virgin Islander:

• US$10.00 on the first acre or part acre of land; and
• US$3.00 on each additional acre or part acre of land.

 Where the land in question is owned by an expatriate:

• US$50.00 on half an acre of land or less;
• US$150.00 on more than half an acre of land but not exceeding one acre of land; and
• US$50.00 on each additional acre or part of an acre of land exceeding one acre of land.

Where a person holds land under a lease from the Crown with a term exceeding one year, the land is taxed at the rate applicable to a British Virgin Islander, irrespective of whether the lessee is a British Virgin Islander or an expatriate.

The element of property tax attributable to houses/buildings is calculated at the rate of one and a half percent per annum on the notional annual value of the building in question. The notional annual value is an amount, not in excess of the rent, which the building might reasonably be expected to yield from year to year.

The Annual Assessment 

The Inland Revenue Commissioner assesses and reassesses all property in the BVI liable to the payment of property tax annually and prepares an assessment list which includes the names of property owners and the amount of property tax due for any given year.

The assessment list is required to be published in each inhabited island and in such parts of each inhabited island as the Minister responsible for finance deems expedient.

The assessment list is to be accompanied by a notice advising the owners of the properties referred to in it, that they may appear before a hearing of the Magistrate at the date and place referred to in the notice if they wish to object to the assessed value of their property as detailed in the assessment list.

Property owners who do not agree with the contents of the assessment list as it relates to their property may appear before the Magistrate on the dates and at the times of the hearings stated in the assessment list and state their objections.

At the hearing, the Magistrate will enquire into the assessment, hear and determine the objection and confirm, and alter, or amend the assessment list as is necessary.

Conclusion

Property owners are encouraged to set a reminder to check the assessment list and to pay the property tax attributable to their property on time to avoid the imposition of avoidable interest.

For some BVI property owners it can be challenging to check the amount of property tax that is due and to make timely payment, particularly where they are unable to be in the BVI when the property tax becomes payable. We regularly help property owners ascertain the amount of property tax due and facilitate timely payment to ensure they remain compliant with their property tax obligations. Our service includes annual reminders at the appropriate time to give BVI property owners one less thing to think about.

Please contact us if you would like any assistance with ascertaining and paying your property tax.

 

For more information or if you require any assistance with your BVI property, please feel free to email us or reach out to one of our BVI real estate lawyers using the contact details here.

 

 

Introduction

The Stamps (Amendment) Act 2023 (the Act) is now in force, having been granted assent by the Governor on 20 March 2023 and extends the stamp duty exemption available to Belongers who are first time property owners until 20 March 2024.

Download a PDF of our Legal Guide – Stamp Duty in the BVI – The Stamps (Amendment) Act 2023

The exemption

Stamp duty is a documentary tax that is levied in connection with certain specified legal documents. The primary legislation governing the assessment of stamp duty in the BVI is the Stamp Act. The Act further amends the Schedule to the Stamp Act by exempting certain Instruments effecting the sale or transfer of BVI property from the obligation to pay stamp duty.

The exemption applies only in respect of the sale or transfer of BVI property:

• to a Belonger who is a first-time property owner; and
• for a period of one year from the coming into force of the Act.

The exemption under the Act is expressed to apply to Instruments effecting both the sale and the transfer of BVI property to Belongers. The exemption under the Act therefore captures transfers of property in consideration of natural love and affection, notwithstanding only nominal stamp duty is typically payable in connection with such transfers.

In the context of BVI property transactions, stamp duty is typically paid by the purchaser.

Belongers and Non-Belongers

In broad terms, Belonger status is a legal classification that is associated with a number of British Overseas Territories, though the requirements to attain this status and the rights that such status confers, vary from territory to territory.

As far as the BVI is concerned, a Belonger is a person deemed to belong to the BVI according to the Virgin Islands Constitution Order 2007.

The Stamp Act

Where the exemption under the Act does not apply, the stamp duty payable in connection with the sale of BVI property to a Belonger shall be calculated at a rate of 4% of the higher of the purchase price and the market value of the property in question.

The Non-Belongers Land Holding Regulation Act

In general terms, the rate of stamp duty payable in respect of Instruments effecting the sale or transfer of BVI property to Non-Belongers is higher compared with that payable by Belongers.  For example, the Non-Belongers Land Holding Regulation Act (the NBLHR Act) provides that the stamp duty payable in connection with the sale of BVI property to a Non-Belonger is calculated at a rate of 12% of the higher of the purchase price and the market value of the property in question.

The Act does not apply to Instruments effecting the sale or transfer of BVI property to Non-Belongers and the provisions of the Stamp Act in conjunction with the NBLHR Act will continue to govern the stamp duty regime in respect of such Instruments.

First time property owners

The Act does not include a definition of a first-time property owner and it remains unclear what verification will be undertaken to determine whether a person is indeed a first-time property owner.

Conclusion

The Act provides for significant stamp duty savings for Belongers in a position to take advantage of the exemption.

Belonger purchasers wishing to take advantage of the exemption should bear in mind that the Act provides that where a Belonger benefits from the exemption under the Act and subsequently sells or transfers the property to a Non-Belonger within a period of seven years, the stamp duty waived by way of the exemption shall become due.

For more information or if you require any assistance with your BVI property transaction, please feel free to email us or reach out to your usual GHP contact.

Introduction

There is now an updated version of this guidance.  Click here for the March 2023 legal guide on the Stamp Duty exemption for first-time belonger home buyers.

The Stamps (Amendment) Act 2022 (the Act) is now in force, having been granted assent by the Governor on 21 March 2022 and is anticipated to have a positive impact on the number of property transactions taking place in the British Virgin Islands.

Download a PDF of our Legal Guide – Stamp Duty in the BVI – The Stamps (Amendment) Act 2022

The exemption

Stamp duty is a documentary tax that is levied in connection with certain specified legal documents. The primary legislation governing the assessment of stamp duty in the BVI is the Stamp Act. The Act amends the Schedule to the Stamp Act by exempting certain Instruments effecting the sale or transfer of BVI property from the obligation to pay stamp duty.

The exemption applies only in respect of the sale or transfer of BVI property:

• to a Belonger who is a first-time property owner; and
• for a period of one year from the coming into force of the Act.

The exemption under the Act is expressed to apply to Instruments effecting both the sale and the transfer of BVI property to Belongers. The exemption under the Act therefore captures transfers of property in consideration of natural love and affection, notwithstanding only nominal stamp duty is typically payable in connection with such transfers.

In the context of BVI property transactions, stamp duty is typically paid by the purchaser.

Belongers and Non-Belongers

In broad terms, Belonger status is a legal classification that is associated with a number of British Overseas Territories, though the requirements to attain this status and the rights that such status confers, vary from territory to territory.

As far as the BVI is concerned, a Belonger is a person deemed to belong to the BVI according to the Virgin Islands Constitution Order 2007.

The Stamp Act

Where the exemption under the Act does not apply, the stamp duty payable in connection with the sale of BVI property to a Belonger shall be calculated at a rate of 4% of the higher of the purchase price and the market value of the property in question.

The Non-Belongers Land Holding Regulation Act

In general terms, the rate of stamp duty payable in respect of Instruments effecting the sale or transfer of BVI property to Non-Belongers is higher compared with that payable by Belongers.  For example, the Non-Belongers Land Holding Regulation Act (the NBLHR Act) provides that the stamp duty payable in connection with the sale of BVI property to a Non-Belonger is calculated at a rate of 12% of the higher of the purchase price and the market value of the property in question.

The Act does not apply to Instruments effecting the sale or transfer of BVI property to Non-Belongers and the provisions of the Stamp Act in conjunction with the NBLHR Act will continue to govern the stamp duty regime in respect of such Instruments.

First time property owners

The Act does not include a definition of a first-time property owner and it is unclear at this stage what verification will be undertaken to determine whether a person is indeed a first-time property owner.

Conclusion

The Act provides for significant stamp duty savings for Belongers in a position to take advantage of the exemption.

Belonger purchasers wishing to take advantage of the exemption should bear in mind that the Act provides that where a Belonger benefits from the exemption under the Act and subsequently sells or transfers the property to a Non-Belonger within a period of seven years, the stamp duty waived by way of the exemption shall become due.

For more information or if you require any assistance with your BVI property transaction, please feel free to email us or reach out to one of our lawyers using the contact details below.

Introduction

The Stamp (Amendment) Act 2020 (the Act) is now in force, having been granted assent by the Governor on 23 July 2020 and is anticipated to have a positive impact on the number of property transactions taking place in the British Virgin Islands.

Download a PDF of our Guide to the Stamp (Amendment) Act 2020.

The Exemption

Stamp duty is a documentary tax that is levied in connection with certain specified legal documents. The primary legislation governing the assessment of stamp duty in the BVI is the Stamp Act. The Act amends the Stamp Act by exempting certain Instruments effecting the sale or transfer of BVI property from the obligation to pay stamp duty.

The exemption applies only in respect of the sale or transfer of BVI property:

• to Belongers; and
• where the Instrument in question is executed between 7 May 2020 and 31 May 2021.

The exemption under the Act is expressed to apply to Instruments effecting both the sale and the transfer of BVI property to Belongers. The exemption under the Act therefore captures transfers of property in consideration of natural love and affection, notwithstanding only nominal stamp duty is typically payable in connection with such transfers.

In the context of BVI property transactions, stamp duty is typically paid by the purchaser.

Belongers and Non-Belongers

In broad terms, Belonger status is a legal classification that is associated with a number of British Overseas Territories, though the requirements to attain this status and the rights that such status confers, vary from territory to territory.

As far as the BVI is concerned, a Belonger is a person deemed to belong to the BVI according to the Virgin Islands Constitution Order 2007.

The Stamp Act

Instruments effecting the sale or transfer of BVI property to Belongers executed (i) prior to 7 May 2020; or (ii) after 31 May 2021 will not be covered by the exemption under the Act.

Where the exemption under the Act does not apply, the stamp duty payable in connection with the sale of BVI property to a Belonger shall be calculated at a rate of 4% of the higher of the purchase price and the market value of the property in question.

The Non-Belongers Land Holding Regulation Act

In general terms, the rate of stamp duty payable in respect of Instruments effecting the sale or transfer of BVI property to Non-Belongers is higher compared with that payable by Belongers.  For example, the Non-Belongers Land Holding Regulation Act (the NBLHR Act) provides that the stamp duty payable in connection with the sale of BVI property to a Non-Belonger is calculated at a rate of 12% of the higher of the purchase price and the market value of the property in question.

The Act does not apply to Instruments effecting the sale or transfer of BVI property to Non-Belongers and the provisions of the Stamp Act in conjunction with the NBLHR Act will continue to govern the stamp duty regime in respect of such Instruments.

Reimbursement

As a consequence of the retrospective nature of the legislation, the Act provides for the reimbursement of any stamp duty already paid from 7 May 2020 in respect of Instruments covered by the exemption.

Conclusion

The Act provides for significant stamp duty savings for Belongers in a position to take advantage of the exemption and the Act does not include any limits on the amount of the exemption available or the number of persons that may benefit from the exemption.

Belonger purchasers wishing to take advantage of the exemption should bear in mind that the Act provides that where a Belonger benefits from the exemption under the Act and subsequently sells or transfers the property to a Non-Belonger within a period of seven years, the stamp duty waived by way of the exemption shall become due.

Anecdotally there appears to be a lot of local interest in the Act and it will be interesting to ascertain at the end of the qualifying period what impact the Act has had on the volume of property transactions taking place in the BVI.

 

For more information or if you require any assistance with your BVI property transaction, please feel free to email us or reach out to one of our lawyers using the contact details below.