Situated about 430 miles (700 km) south of Miami are the islands of Grand Cayman, Little Cayman, and Cayman Brac. This heavenly archipelago has experienced a substantial upswing in development in recent years, becoming one of the fastest-moving property markets in the Caribbean. This is especially true for Grand Cayman’s luxury real estate market, which continues to flourish even amidst the Covid-19 pandemic.
When delving into the history of real estate development in Grand Cayman one name stands out as a pioneering visionary, this name is Mike Ryan. In his role as a leader and innovator in the luxury resort and residential development, Mike Ryan and his associates are responsible for changing the trajectory of Grand Cayman by unleashing the vast potential of Seven Mile Beach as a luxury destination. Mike achieved this through the development of The Ritz-Carlton Grand Cayman. A resort, with 365 rooms and 93 private residences, increased the area’s real estate value by over 300%, won dozens of awards, and transformed Grand Cayman’s tourism industry. Not to mention elevating the lifestyle of the island with five-star accommodations, restaurants, and services.
As the island’s luxury real estate matures, the number of investors purchasing properties continues to boom, and predictions show that this trend is here to stay. Cayman’s infrastructure, safety, beauty, superb quality of life, and appealing tax structure continue to make it an attractive destination for investors. However, when investing in a different country and in an unknown market, doubts or reservations are bound to arise and the Cayman Islands have had their fair share of misconceptions. From the inner workings of the buying process to the legal issues implied, many have false impressions about the complexity of purchasing luxury real estate within this trio of islands. If you are currently thinking about entering the Cayman Islands property market but have questions about doing so read on as we clarify four of the most common misconceptions people tend to assume about buying into Cayman’s luxury real estate market.
Misconception #1: The process of buying a property is too complex.
This could not be further from the truth. Thanks to a transparent and mature legal framework, buying property in the Cayman Islands is safe and straightforward. As an autonomous British Overseas Territory, the government welcomes investments from overseas buyers guaranteeing the right of ownership for each parcel of land. Although there are no restrictions on foreign ownership, the only material closing cost is Stamp Duty, which amounts to 7.5% of the purchase price or the market value. But after that, property, income, or capital gains taxes are non-existent. Properties can also be bought under an individual or a corporation which can provide flexibility for tax planning purposes.
Another upside is that the Cayman Islands have no requirements to develop or build on the purchased land within a specific time frame, which does happen in other Caribbean islands. Furthermore, even applying for a mortgage is an easy and straightforward process in the Cayman Islands. Both residents and overseas investors can work with local lenders when interested in purchasing a property. Rates and ratios are flexible and competitive.
Misconception #2: Legal and taxation issues are too intricate.
Again, this is a misconception since the Cayman Islands are internationally known for their tax-neutral status. As mentioned above, apart from the stamp duty, no other form of taxation exists on property within the islands. This means no inheritance, income, property, capital gains, or tourism taxes apply regardless of whether the property is being rented out as an investment or not.
Furthermore, the Cayman Islands make it relatively easy to obtain residency and, eventually, if someone wants it, citizenship. An effective way to qualify for this is through property ownership. Moreover, the government recently introduced the Global Citizen Concierge Programme, which allows digital nomads to work within the islands for up to two years.
Misconception #3: The pandemic diminished the investment potential
Even though Covid-19 shut the Cayman Islands’ borders for some time, the luxury real estate market within them continued to thrive. Now more than ever, investors from all across the globe have chosen this as their destination to relocate. This is primarily upon recognizing just how safe the Cayman Islands are due to their world-class infrastructure, healthcare system, and stable government. In the more than twenty months in which the islands were Covid-free, the economy remained stable, giving the real estate market a chance to grow even more.
Misconception #4: The environmental impact is too damaging.
With world-class beaches and astonishing natural landscapes, thinking about the environmental impact of real estate is a priority within these islands. However, it is essential to understand that while the luxury real estate market plays a big part in the matter, it can also mitigate it. Through good design and planning, many environmental hazards today can be reduced and oriented towards more sustainable resolutions for the environment. Furthermore, luxury property investors can present a better return for the island than mass tourism or manufacturing, both of which had much more grave consequences for the sustainability of the environment. An example of this is that the economic influence of a single high-net-worth visitor outranks the revenue generated by over a thousand cruise ship passengers. Therefore creating a scenario in which luxury real estate can represent a significant economic influence for the islands while maintaining a lower environmental consequence.
Overall, entering the luxury real estate market in the Cayman Islands remains a smart and strategic investment. More than ever the industry appears to be thriving and Cayman continues to position itself as a safe haven for local and overseas investors because of its many favorable conditions: high standard of living, tax-neutral status, economic and political stability, top-notch health care system, breathtaking scenery, and sunny tropical weather.
As the former Chairman of the Cayman Islands National Investment Council and a board member of the Private Finance Initiative Oversight Committee and the Planning Review Committee, Mike Ryan’s interests in Cayman are demonstrably long term. His company Silverfin Development is based in Grand Cayman and focuses on projects in the Caribbean, UK, and Latin America as Mike continues on his mission to innovate and revitalize the luxury real estate market.
Disclaimer: Mike Ryan is not an investment agency and this information is provided for general educational purposes only, without any guarantee as to the accuracy, validity, or suitability of this information for any purpose whatsoever. Mike Ryan does not provide legal and/or tax advice.