Oran Hall | Buying property in Jamaica from the US

QUESTION: I am interested in buying a house in Jamaica. I live and work in the USA. I would be grateful for some information about how I would do so.

Gary

FINANCIAL ADVISER: A good place to start is the website of the Realtors Association of Jamaica http://realtorsjamaica.org/ - where you will be able to identify a realtor who is licensed to deal in real estate matters and who is equipped to guide you through the process of securing the home of your choice.

The realtor will help you navigate the process and will also be able to give you information regarding zoning, utilities, schools, and other matters of interest on the communities in which houses for sale are located to enable you to determine if the environment is right for you.

The realtor is often able to source houses from those advertised but also from among those available for sale though not actively advertised because of the contacts that they have and the referrals made to them. Realtors also assist with negotiation of prices, the date of possession, inspection, and investigations, among other services.

To be able to make a purchase, you should have a Taxpayer Registration Number (TRN). If you do not, you can download the application form from www.jamaicatax.gov, complete and sign it, copy the first two pages of your passport, and have a notary public sign them. You will also need to send a letter authorising the person of your choice to act for you in making the application and collecting your TRN.

You should decide exactly what you want before setting out to make this major investment, for instance, the type of house you want, including its size and features and where you would like it to be. These will have a strong bearing on the price, so you should determine how much you have to spend when deciding on the house you want.

It is the responsibility of the realtor to match the property to your unique needs and show you what the property looks like. Technology can facilitate this easily. Once you have satisfied yourself that you want to purchase a particular property, you should make an offer to the vendor either directly or through his representative through your legal representative a reputable attorney at law or law firm. Your legal representative is the person who will relate to the legal representative of the vendor regarding legal matters.

If your offer is accepted, a land survey and title search should be done to identify what you are buying and to ensure that there are no other claims or conflicting interests registered against it. Your legal representative is best able to do this for you.

The vendor's attorney will then prepare the sale agreement, which you will sign, and then make the deposit. The vendor also signs that document, thus making the agreement binding on both parties. It should be submitted to the Office of the Registrar of Titles and government duties paid. Documents relating to the transfer of property should be stamped within 30 days of being signed to avoid substantial penalties.

As purchaser, you will pay the following based on the value of the transaction: stamp duty (2 per cent), registration fee (0.25 per cent), both of which go into the Government's coffers; attorney's fee, which tends to range from 1.5 per cent to 5 per cent; preparation of sales agreement, which tends to be 0.2 per cent. There may also be miscellaneous charges to cover such items as preparing the letter of possession. All charges, excluding the stamp duty and registration fee, are negotiable and attract general consumption tax at the rate of 16.5 per cent.

The house will be yours when you have made the final payment and the title has been transferred to you. The process will be longer if you need to secure a mortgage. It is possible to borrow funds from local commercial banks and building societies, but there will be some additional expenses. The internet can assist you to identify them and learn about them and what their requirements are for granting mortgages.

Not being a client of theirs now will not exclude you from borrowing from them, but they will want to be satisfied that you are able to make the required deposit on the property and can service the loan. There are slight variations in the requirements of the various lending institutions, and they generally have a pre-qualification process that allows them to determine how much you can afford.

Among the documents required when applying for a loan are a job letter, your last two, and in some cases, three payslips from your current employer; identification; and Taxpayer Registration Number (TRN) or social security number. The documents you sign at the various stages of the process should be certified by a notary public.

I hope you find your Jamaican home soon.

- Oran A. Hall, principal author of 'The Handbook of Personal Financial Planning', offers personal financial planning advice and counsel. finviser.jm@gmail.com