Knowledge

With no specific date in sight, the Cayman Islands Government has presented the 2026-2027 Budget Address, a comprehensive document detailing its upcoming revenue measures for 2026 and 2027. Among these measures is a significant increase in stamp duty levied on high end real estate transactions.

Under the proposal outlined in the Budget Address, the rate of stamp duty on residential transactions valued at CI$2 million or more will increase from 7.5% to 10%. For example, a CI$3 million purchase would incur an additional CI$75,000 in duty under the proposed rate.

Currently, the effective date for this change is unclear. The uncertainty surrounding the effective date means that implementation could occur with little notice following budget approval.

Given the proposed increase, parties who have executed an Offer to Purchase, Agreement for Sale or Development Agreements (for off-plan purchases such as at Lacovia or the Watermark) may benefit from locking in the current 7.5% duty rate by having these documents assessed and stamped before the new rate takes effect.

This strategy may result in a significant duty saving on the transfer of the underlying land or property, but it requires swift action and must be carefully weighed against the statutory requirements for timely submission of documents. The Stamp Duty Act (as revised) generally requires documents subject to ad valorem duty (duty calculated on value) to be presented to the Lands & Survey Department for assessment and stamping within 45 days after execution, but this would require careful commercial consideration as Lands & Survey will levy late payment penalties and interest if documents are submitted later than 45 days after execution.