Guide to stamp duty rates and other fees on real estate transactions in the Cayman Islands including stamp duty exemptions for Caymanian buyers.
Stamp duty, which is payable on all conveyances or transfers of any immovable property (other than those between certain family members as set out in the Stamp Duty Act for natural love and affection), is 7.5%. However, in September 2023 the Cayman Islands Government announced new CI Stamp Duty exemption thresholds for first time and second time Caymanian buyers, for the purpose of that person’s first and second immovable property. This has obviously been set in place to help lower-income Caymanians get onto the property ladder. It has also been done to help those that live in Cayman Brac, and those that want to live anywhere in Grand Cayman from Prospect going East, as it is now next to impossible to find land or a property under these values anywhere from Grand Harbour through George Town to West Bay.
Caymanians purchasing their first property, are eligible for either a full abatement of stamp duty or a reduced stamp duty rate based on the type of property (raw land or developed residential property) and the market value or purchase price of the property, as long as the full value of the property falls under a certain amount. Read on for specific values.
• For a Caymanian purchasing their first parcel of raw land, there will be no stamp duty assessed on values up to CI$250,000. Where the property value is above CI$250,000 but less than CI$350,000, stamp duty will be assessed at 3.75% on the difference above $250,000 only. If the land costs more than CI$350,000 then there is no stamp duty concession, and you have to pay 7.5% duty on the entire amount.
• For a Caymanian purchasing their first developed residential property, there will be no stamp duty assessed on values up to CI$550,000. Where the property value is above CI$550,000 but less than CI$650,000, stamp duty will be assessed at 3.75% on the difference above $550,000 only.Again, if the property costs more than CI$650,000 then there is no stamp duty concession, and you have to pay 7.5% duty on the entire amount.
• For a group of two to 10 Caymanians purchasing their first parcel of raw land together, there will be no stamp duty assessed on values up to CI$450,000. Where the property value is above CI$450,000 but less than CI$550,000, stamp duty will be assessed at 3.75% on the difference above CI$450,000 only.
• For a group of two to 10 Caymanians purchasing their first developed residential property together, there will be no stamp duty assessed on values up to CI$600,000. Where the property value is above CI$600,000 but less than CI$700,000, stamp duty will be assessed at 3.75% on the difference above CI$600,000 only.
Caymanians purchasing their second property, are eligible for a reduced stamp duty rate based on the type of property (raw land or developed residential property) and the market value or purchase price of the property.
• For a Caymanian purchasing their second property, comprising of a parcel of raw land, stamp duty will be assessed at 3.75% on values up to CI$300,000.
• For a Caymanian purchasing their second property, comprising of developed residential property, stamp duty will be assessed at 3.75% on values up to CI$600,000.
• For a group of two to 10 Caymanians purchasing their second property, comprising of a parcel of raw land, stamp duty will be assessed at 3.75% on values up to CI$550,000.
• For a group of two to 10 Caymanians purchasing their second property, comprising of developed residential property, stamp duty will be assessed at 3.75% on values up to CI$700,000.
For Non-Caymanian buyers, there are no stamp duty concessions.
For first time Caymanian buyers, if the concession threshold is exceeded then the full 7.5% Stamp Duty fee is payable on the whole property value. Specific details are outlined below:
For Second time Caymanian buyers, the concession threshold is exceeded and the full 7.5% Stamp Duty fee on the whole property value is payable if:
Take note that in 2021, the Government changed the approach to assessing Stamp Duty on pre-construction properties. Up to the previous year, that duty was calculated on the published developer’s price at completion. Note: the law has not changed, just its interpretation. Stamp duty has always been charged on the purchase price or on the market value, whichever is higher, as assessed by the Lands and Survey Department. As real estate prices have gone up, it is very likely that a pre-construction property, with a purchase agreement signed one or more years prior to completion, will be assessed by officials to be worth more than the agreed purchase price. An alternative to the unknown appreciation costs is to pre-pay the 7.5% Stamp Duty, but in that case, purchasers run the risk of the development not going ahead, and stamp duty fees are not refundable!
If a purchaser elects to pay the ad valorem duty on an agreement for sale of a property, it must be presented to Lands and Survey within 45 days of the first day on which any obligation under the agreement was discharged. Otherwise, the purchaser may elect to pay CI$100 stamp duty on the agreement and then must pay the stamp duty payable with the transfers of land within 45 days of the date of the transfer of land, i.e. the closing date.
> 1% charged on mortgages of CI$300K or less and 1.5% on mortgages of more than CI$300K. You should budget up to 1% for legal and registration fees.
> When you build a house, building permit fees are charged according to the square footage of the property being built.
> When purchasing with bank financing, the bank will require a report on the ‘market value’ of the property. Each lender has its own rules but the report will usually need to be prepared by an approved firm of professional valuation surveyors. Aim to pay in the region of CI$700 for this report.
Other Considerations
Note that furnishings (officially known as chattels) may be deducted from the sale price of a property before the stamp duty is calculated. Movable property such as furniture and appliances are not subject to stamp duty. Other things included as chattels: carpets, blinds and curtains, free standing furniture, refrigerators and cooker (as long as it is not built in), light shades and fitting and potted plants. The following things will not normally be regarded as chattels: kitchen and bathroom fitted cupboards as well as sinks and worktops, wall mounted or fitted appliances (oven, hood, microwave), floor and wall tiles, air conditioning systems, hot water heater, ceiling fans, hurricane shutters etc. Please note that solar panels are always considered part of the house/property and are not considered a removable chattel. Work with your real estate agent to deduct these from sales price before calculating stamp duty.
Otherwise, call the Lands and Survey Department on (345) 244 3420 or visit their website and they will be happy to discuss your situation and calculate the value of your potential property.
