When you think of a tropical paradise, which images are the first to jump into your mind’s eye? Most of us picture golden sandy beaches, palm trees, blue skies, clear turquoise seas, and warm sunshine. Sound too good to be true? Well, that basically describes Belize in a nutshell! Belize is a tropical paradise situated on Central America’s East Coast. In addition to being a veritable paradise, Belize is a tax haven. There are also a number of tax incentives in Belize, especially for people considering investing in Belize real estate. If you are considering investing your hard-earned money, there are plenty of Belize real estate tax incentives for you to consider. But just what is it about this tropical paradise that investors and business-savvy individuals alike can’t seem to get enough of? Here’s a detailed look at why Belize is considered a tax haven, especially for people investing in Belize real estate.
TAXES IN BELIZE
Before we discuss the many tax incentives in Belize, let’s first take a more general look at the taxation system currently in place in Belize. To begin with, if you are considering moving to Belize, you need to be aware that you will face income taxes on any money earned in Belize (e.g. if you work for a Belizean company or start a business in Belize). Any money that you generate outside of the country however, is completely tax-free. Individuals earning $20,000 BZD ($10,000 USD) or less, pay no income taxes at all. For any income in excess of $20,000 BZD however, you will pay a flat rate of 25% income taxes once you have had your salary calculated.
WHAT MAKES BELIZE A TAX HAVEN?
Now let’s get to the good stuff, as we look at some of the many reasons why Belize is a tax haven. Back in the 1990s, the Belize government started proceedings to ensure that Belize became a tax haven. The idea was to basically completely eradicate taxes on a variety of income sources, including revenues made offshore, dividends, capital gains, and interest. In addition, the Belize government also decided to completely do away with stamp duty. Finally, in 1996, Belize formed the IBC (International Business Companies) Act, the Offshore Banking Act, and the Trusts Act.
These programs helped to solidify Belize as arguably the most business-friendly country in the entire world. As a result of this legislation, incorporation processes can be completed in mere hours, there are no reporting requirements, and businesses enjoy tax-free status. Some of the primary features of establishing this International Trust is the fact that individuals will receive permanent exemptions from business taxes and personal earnings which have been generated by any assets which may have been in a trust. Not only that, but estates will also benefit from wide-ranging tax exemptions in relation to inheritance, gifting, and succession.
REAL ESTATE INVESTING AND TAX INCENTIVES
As you’re already well aware, investing in real estate is one of the safest and most reliable methods of investing your finances, no matter where you happen to be. In Belize however, there are countless real estate tax incentives that make Belize real estate a solid investment. These incentives are attractive – in fact they may sound too good to be true. Rest assured however, they most certainly are true, which is why keen investors from all over the globe are pouring their finances into Belize real estate and are reaping the rewards. These rewards go beyond just very, very healthy profits: they also come in the form of incredibly impressive tax incentives as well. Here’s a quick look at some of the primary reasons why Belize is considered to be such an incredibly attractive location for people looking to invest in real estate.
REASON #1: PROPERTY TAXES IN BELIZE ARE EXTREMELY LOW
First and foremost, one of the main reasons why people are so keen to invest their money in Belize real estate is that Belize property taxes are incredibly low. In Belize, taxes on property are a fraction of what they are in countries like Canada, the USA, or the UK. If you look at rental incomes for example, the taxes on incomes generated by renting a property in Belize are just 1.75% of gross receipts. What’s more, the overall property taxes in Belize on most new properties are on average just a few hundred dollars. Yes, you read that right: not thousands of dollars…hundreds.
REASON #2: PROTECT YOUR LEGACY: NO CAPITAL GAINS TAX
Another reason why taxes in Belize are so attractive is the fact that you pay no capital gains tax on Belize real estate. That means that when you sell any real estate in Belize, you pay absolutely NO capital gains tax. What’s more, when the time does come for you to sadly shuffle off this mortal coil, when you do pass on, your heirs will NOT be liable for any inheritance taxes. Having no capital gains tax basically means that if you purchase a property and it then increases in value, in the event you ever do sell it later for a healthy profit, you do not have to pay the Belize government any taxes on your earnings.
REASON #3: ASSET PROTECTION: THE BELIZE TRUST ACT
Back in 1992, the Belize government established the Belize Trust Act. This act was established to basically allow individuals to create offshore assets protection trusts in Belize so that they can protect their earnings and prevent governments from taxing them. This offers great peace of mind because nobody wants to pay more taxes than they need to, and why would they?
REASON #4: INCOME PROPERTY: BELIZE IS AN OVERNIGHT RENTAL MARKET PARADISE
As Belize is such a stunning part of the world, tourism is one of the main sources of income, as people from all over the globe fly and sail here every single day to soak up the sun and relax in this beautiful tropical paradise. Naturally, the demand for overnight rentals is higher than ever, which, from an investor point of view, is very attractive indeed. As the demand is for overnight rentals as opposed to monthly rentals, many investment properties, especially those in prime vacation destinations (e.g. beachfront Condos) have the potential to multiply their income potentials. Just to give you an idea of what sort of numbers you could be talking about: If for example, a property was steadily being rented out month-to-month, it could generate say, $2000 per month. That’s not bad, right? But if you went the overnight rental market route, you could potentially generate $450, or more, per night! That means that, per month, your property could potentially be making between $13,000 and $14,000! Looking for income property? Consider Belize real estate!
REASON #5: POTENTIAL TAX WRITE-OFFS
Upon consulting with your accountant, you could potentially discover that any trips to go and check in on your property in Belize could be tax write-offs. That’s right, by jetting, or sailing over to this warm, sunny, tropical paradise, you could potentially write off these trips and claim them as part of your expenses.
REASON #6: REAL ESTATE VALUES IN BELIZE ARE ONLY GOING TO INCREASE
As if the tax incentives in Belize weren’t appealing enough, how about the fact that real estate values in Belize are only going to go up and up? Belize is desirable, not only from a tourist’s perspective, but also from a business stand point as well, and as the economy is doing so well, real estate values have consistently been trending up more and more with each passing year. With long, short, and overnight rental rates steadily rising, the potential for very healthy profits is there for all to see. Put simply, by investing in real estate in Belize, you are virtually guaranteed to see a very healthy ROI, in a relatively short period of time. There aren’t many investments that will yield the types of potential for profit that Belize real estate provides, so the advice here would be to invest sooner, rather than later.