Before we take a closer look at investing in Cayman Islands real estate and how your investment relates to taxes, let’s first look at the history of why the Cayman Islands is a tax free jurisdiction.
Legend has it that one stormy night in November 1788, the Cordelia, the lead ship of a convoy of ten merchant ships returning to Britain from Jamaica went aground off East End’s shallow reef. The Cordelia gave off a signal to warn off the other ships in the convoy, but it was misunderstood as a call to follow closer and nine more ships sailed haplessly to their fate upon the reef. The seafaring people of East End are reported to have shown great valour and bravery in ensuring that no lives were lost. In reward King George III is said to have granted the islands freedom from conscription, while many other claims that freedom from taxation was bestowed on the people of the islands as recognition of their great efforts.
Moving on 200 plus years, well into the new millennia there are presently over 120 different nationalities who have chosen to invest in Cayman. Be it for a few months or a lifetime, there are many positive reasons to choose Cayman to live, invest and grow.
As a tax neutral country no one, rich or poor, pays income or corporation tax. Finance to run the country’s services and infrastructure is levied by the Cayman Islands government through various other means or indirect taxes known as fees. One of the most important of these is the duty placed on imports.
The other major sources of government revenue come from the work-permit fees from the huge expatriate workforce, and the fees raised from tourists entering through the port on cruise ships or those staying in local hotels.
This tax neutral environment has given rise to a hugely successful and significant offshore financial industry, which has made Cayman one of the wealthiest places in the world and a huge favourite among those who are looking to invest in Cayman residential property and Cayman land for sale.
Real Estate Investment Advantages
On top of off-shore Finance, the Cayman Islands is also a thriving tourist destination where visitors often fall in love with the islands enough to want to invest in Cayman Islands property by purchasing their second or third home. With no property taxes other than a one off stamp duty payable upon purchase, investing in Cayman’s real estate market is widely considered a very sound investment. Properties offer good rates of return for owners, and there are no restrictions on foreigners owning property, with the legal and political environment protecting property owner’s rights. Moreover, as there are no inheritance taxes or death taxes, many individuals invest in in a Cayman property to which they eventually retire, making estate planning a far simpler process.
In order to maximise the benefits and make the most of the tax advantages offered by living, working and investing in the Cayman Islands usually requires the assistance of one of the many locally based human resources, law, banking and tax professionals who offer expertise. As tax legislation is continually changing in other jurisdictions and can be extremely complex it is advisable for all those living or investing in Cayman to seek advice. Even though there are no taxes in Cayman, depending on the individual circumstance you may still be required to meet certain tax obligations in your country of origin. Fortunately as Cayman is one of the world’s most successful Offshore Finance Centres there are ample experts on hand. It is worth noting that Cayman is now considered by the OECD among others, as one of the most transparent and co-operative jurisdictions in the world, and is gradually dispelling the negative connotations of a ‘tax haven’.
This brief Cayman tax guide was brought to you by Milestone Properties, a real estate company in Cayman. We believe in quality over quantity in everything we do. We believe that it’s OK to have less listings on our books than our competitors because we service those vendors better, we give our vendors all of our time, we give our buyers real advice, we are real people and we love real estate!