The UK national press paid us a visit the other day. Writers for the Financial Times, The Times, Country Life Magazine all wanting to know all about buying property in the BVI. Here’s the first of several articles to be published…
Buying property on the British Virgin Islands
The financial storm never really hit prices on this Carribean relax haven
The whereabouts of the British Virgin Islands are something of a mystery to most people. The confusion clears only if you mention Necker. This particular Virgin island is owned by Sir Richard Branson, who bought it for £ 180,000 in the 1970s; there are more than 50 others in the archipelago, which lies 200 miles (320km) northwest of Antigua.
For decades, this former colony has been known as an offshore financial haven – and as a Caribbean bolt hole for the yachting set. But this obscurity could soon be a thing of the past, as developers set out to attract second-home buyers from the UK. BVI – as everyone calls the place – will be marketed to those who want Caribbean laid-back luxury, are prepared for a nine-hour flight (and that’s just to Antigua where you change planes) but think the region too expensive. Prices in the BVI were rising at 6-7 per cent a year before the global slowdown. Although transactions are down, prices have held fairly steady.
At present, most of the islands are either uninhabited or populated by a handful of privacy-hungry residents. Even the largest island, Tortola, is largely tree-covered, the mountain roads branching from the capital Road Town to the harbours dotted around the island. As there are no direct flights from the UK, the islands have escaped the flash-cash projects found in other parts of the Caribbean.
To date, most second-home buyers have been American. This is no surprise as, culturally – and despite their name – the islands are more American than British. They use dollars, for one thing. On Tortola, a Scottish entrepreneur is in the process of developing Nanny Cay, a marina on the south side of the island. The 32 townhouses will have space to dock a boat outside – a valuable asset for the yachting crowd. Prices start at $650,000 (£ 390,000) for a two-bedroom flat, and there is an option to enter a rental pool when you are not there (nannycay.com).
Although there is somewhat of a divide between expat properties – which tend to be larger, more modern and with a pool – and those of the islanders, both have enjoyed the wealth of the boom years.
Everyone drives SUVs here – necessary, apparently, for the steep mountain roads – and the GDP per capita makes the BVI one of the wealthiest islands in the Caribbean. Perhaps inevitably, however, much of the new development taking place is aimed at high-end living.
Oil Nut Bay, on the eastern end of Virgin Gorda, the second largest of the islands, is an exclusive holiday complex that will have 88 villas, all with views either to the Caribbean or the Atlantic (oilnutbay.com). Beachside plots cost $5.95 million (£ 3.6 million), while ridge-side plots are priced from $2.85 million (£ 1.7 million) and $25 million (£ 15 million) for one of the larger plots on the top of the ridge. This end of the island is accessible only by boat or helicopter and is definitely high-end; from the specification of the villas to the beach, which has been ‘enhanced’ by bringing sand from another Caribbean island.
‘This is going to be a very low-density development – we had permission for 400 homes but have cut that down to 88,’ Mike Lorence, the development’s vice-president of sales, said. ‘It will be like having a private island with all the amenities of a village.’
For those who prefer to live among the island’s community, three and four-bedroom seafront houses cost about $3 million (1.8 million), depending on the size of the property and the location. Sea’s Song Villa, a three-bedroom property on Virgin Gorda, is on the market for $2.95 million. Perched on a ridge above a secluded beach, the house has views over the bay to St John’s, 10 miles (16km) away.
The islands are unspoilt in part because they are so difficult to get to; to get to Virgin Gorda you need either to charter a small plane from Antigua or one of the larger islands, or get one of the services to Tortola with the Caribbean carrier Liat, and then a boat to Spanish Town.
But the distance has, in many ways, preserved the island’s low-key charm.
While still definitively wealthy, they are still more boating-set than handbag-set; the people who buy here tend not to be the casino-loving types that buy property on South Beach or in the Bahamas.
‘There’s no Gucci, no Prada,’ Cameron McColl, the owner of Nanny Cay, said. ‘That’s a big difference with some of the other Caribbean islands. It’s not cool to be flash here.’
Coldwell Banker BVI: coldwellbankerbvi.com, 001 284 495 3000; Savills International: savills.com/abroad, 020-7016 3740
With no corporate income tax, no capital gains tax and only a low ‘payroll’ tax rate, BVI has attracted the wealthy for decades.
For residents, income tax kicks in at $10,000 (£ 6,000), and thereafter is charged at 14 per cent, only part of which is paid by the employee.
But, says Tanis McDonald, of KPMG in the BVI, the archipelago is no ‘tax dodge’; in August, it moved on to the OECD’s white list after agreeing to international standards on tax compliance.
Would-be house buyers must apply for a ‘non-belongers’ land-holding licence, or if buying land, submit proposals outlining the size and cost of future buildings. Owners of land not developed within the usual two-year time limit could forfeit 40 per cent of the sale value.
The Times Online article