What is Stamp Duty?

Friday, June 10, 2005

Although there are no property taxes in the Cayman Islands � actually no taxes to speak of � there is a one-time �stamp duty� which is due on most real estate transactions. You can think of it as a transfer tax, and once it is paid, you can hold Cayman Islands Real Estate indefinitely without paying another cent. The stamp duty is based on a percentage based on the purchase price or the value of the property, whichever is greater. Generally, the purchaser pays the stamp duty, but occasionally a seller will offer to pay all or some of the stamp duty as an incentive to the purchaser.

The stamp duty percentage for the properties along Seven Mile Beach and in Downtown has been temporarily reduced from 9 percent to 5 percent, and the rate on properties throughout the rest of the Island was reduced from 7.5 percent to 5 percent. This reduction in rates was instituted by Government as a way of enticing real estate purchase during a cyclical down period of the market. All assessed stamp duties must be paid in full before transfer of the title is registered. A minimal stamp duty (1�1.5 percent, depending on the borrowed amount) is also charged on registered mortgages, in addition to any loan origination fees and legal fees a particular financial institution might charge.

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