News

The Cayman Islands Government has good news for those Caymanians looking to buy their first homes in the Cayman Islands. The changes to stamp duty in The Stamp Duty (Amendment) Bill 2018 (‘Bill’) propose significant increases in the thresholds for stamp duty concessions to help ease the financial burden on first-time Caymanian property buyers.

UPDATE: When the Bill became The Stamp Duty (Amendment) Law, 2018, there was a significant alteration in wording which allows developers with planning permission in place by 30 June 2019 to have a year to take advantage of the pre-existing regime for stamp duty on ‘linked property transactions’, provided they enter into their contracts before 31 December 2019. For more information, please see our piece Welcome delay in change to Cayman Islands Stamp Duty law gives developers another year before Stamp Duty increase. For the current position on stamp duty and linked property transactions see our piece: What is the new stamp duty position on linked transactions?

Stamp duty on real estate purchases

Generally, when purchasing real estate in the Cayman Islands you can expect to pay stamp duty at a rate of 7.5% of the value of the property. For Caymanians purchasing their first home, there are already stamp duty concessions available, but the new Bill proposes significant increases in the threshold before stamp duty is payable. It also increases the availability of discounted stamp duty rates for lower value properties and introduces concessions for groups of Caymanians who wish to purchase a property together.

What are the threshold increases for Caymanian first-time buyers?

No stamp duty (0%)

At present no stamp duty is payable by Caymanian first-time buyers on the purchase of:

• their first home with a value of CI$300,000 or less; or
• undeveloped ‘raw’ land with a value of CI$100,000 or less.

Assuming the Bill passes without amendment, the proposed law will increase these thresholds and remove the requirement that the buyer live in the property, so that no stamp duty is payable by Caymanian first-time buyers on the purchase of:

• land and buildings (whether established or part of a to-be-constructed development) with a value of CI$400,000 or less; or
• raw land with a value of CI$150,000 or less.

Discounted stamp duty (2%)

At present Caymanian first-time buyers pay stamp duty at a discounted rate of 2% on:

• their first home with a value over CI$300,000 but not greater than CI$400,000; or
• raw land with a value over CI$100,000 but not greater than CI$150,000.

Under the proposed law, Caymanians making their first property purchase (whether or not they intend to live in the property) will pay stamp duty at a rate of only 2% on the purchase of:

• land and buildings (whether established or part of a to-be-constructed development) with a value over CI$400,000 but not greater than CI$500,000; or
• raw land with a value over CI$150,000 but not greater than CI$200,000.

What concessions are proposed for group purchases?

The Bill also proposes concessions where two or more Caymanians (but not more than 10) buy property for the first time. Under the proposed law, the rate of concessions is again linked to the value of the property.

No stamp duty (0%)

Eligible groups of Caymanian first-time buyers will pay no stamp duty on the purchase of:

• land and buildings (whether established or part of a to-be-constructed development) with a value of CI$500,000 or less; or
• raw land with a value of CI$300,000 or less.

Discounted stamp duty (2%)

For eligible groups of Caymanian first-time buyers, stamp duty will be payable at 2% on the purchase of:

• land and buildings (whether established or part of a to-be-constructed development) with a value over CI$500,000 but not greater than $600,000;
• raw land with a value over CI$300,000 but not greater than CI$350,000.