Direct inward investment by overseas property buyers is a fantastic source of income for any country in the world. Regions that are good at attracting the worlds real estate investors tend to benefit from increased tourism and investment to bolster their economies. My experience shows that increased regulation serves to put buyers off and punishing investment with taxation means that buyers will go elsewhere.
Trinidad & Tobago real estate was one of our most attractive international investment hotspots for people from the UK, Canada, and the US. I have seen in the last 18 months a complete reverse and now with the new property tax laws proposed 2010 seems to be more of the same.
The Trinidad government concerned with its Tobago land being purchased by overseas investors laid down new laws that restricted ownership. The global slowdown ensued and then crime levels rose making the beautiful Tobago one of the hardest places to sell to an international audience.
International real estate buyers are allowed to buy up to one acre of property in Trinidad for residential use, as long as the transaction is paid for in an internationally traded currency, such as the United States dollars, said Nicole Ferreira-Aaron, a partner at M. Hamel-Smith & Co., a law firm based in Port of Spain. The same restrictions apply for leasehold properties. All foreign buyers must also give notice of their purchase with the Ministry of Finance. There is no special filing fee to do so, said Ms. Ferreira-Aaron; a buyer's lawyer handles the process.
Now owning a property in Trinidad and Tobago may be more expensive as the government seek to raise more revenue from increased property taxation. A new Property Tax Bill changes the basis on which taxes are levied on property from the annual rateable value (i.e. based on rates) to the annual rentable value.
Has the Trinidadian government shot itself in the foot for overseas property investment?
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