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Investing in the Vanuatu's
Real estate
In the last decade, the price
of land has increased steadily in Vanuatu thus making
investment in real-estate very attractive.
At present Vanuatu is one of the best havens for people
wanting to escape the rat-race of the “civilized” world
and dreaming of tropical paradises in the South Pacific.
The real-estate market in Vanuatu has grown at a regular
rate over the last few years because of its stability,
the warm welcome extended to investors both by the
Government and by the people. This situation is going to
be strengthened with the recent enactment of the
Strata-Titles Act which will enable investors to enjoy a
better return on investment.
The land tenure situtation in Vanuatu is based on a land
lease system which is not always well accepted until it
is understood. In fact it is a system that works while
respecting the land of the natives. In some ways,
governments in the Western world manage the problem in
the same manner but relying on a tax system.
The land tenure system is divided into two parts, the
urban areas on one hand and the rural areas on the other.
For the first part (Port Vila & Luganville), the land
belongs to the Government. Most leases are issued for a
period of 50 or 75 years, starting 31/07/1980 (date of
Independence). Recently, with the development of
subdivisions, some leases have been re-negotiated.
Each year, the owner of a lease in the urban area has to
pay a ground rental. The amount varies according to the
surface area and the location of the land (generally, 1%
of the unimproved value of the land).
In the rural areas, it is the custom owners who lease
out the land and negotiations take place directly with
them. In most cases, the lease begins on the date when
the custom owner agrees to grant a lease.
All these leases are made official with the signature of
the Minister of Lands. The same system of annual ground
rent applies.
Currently, one of the greatest assets of the country is
that there is still waterfront land available at
reasonable prices compared to
other countries.
It is not necessary to be a resident of Vanuatu or be
employed in Vanuatu to purchase property, whether
commercial or residential, and earn an income from it.
However, if you want a residency permit, the Immigration
Department will require a deposit by way of guarantee at
the bank. The purchase of a property or a business is
obviously considered as sufficient security to be
granted this document. A work permit is only required
for foreigners who wish to work in the country as
employees, but the investor is exempted if he purchases
a business and is self-employed. In this case, he will
only need a business licence.
TO PURCHASE A PROPERTY,THE
STEPS TO FOLLOW ARE CLEAR AND EASY :
1. Sign a “(provisional) sales agreement”
2. Pay a deposit (generally 10% of the total amount)
3. Sign the “lease transfer” document
4. Pay the transaction
5. Pay 5% stamp duty to the Government
6. Register the transfer of the lease at the Lands
Department and pay the 2% registration fee.
To purchase shares in a company, a fee of 4% is payable.
Mortgage fees represent about 1% of the purchase price.
If you want a real estate agency to manage your property and
collect the rentals, the agency fees are usually 7% of the
gross rentals.
THE TAXES TO BE PAID AS OWNER
RECEIVING RENTS ARE AS FOLLOWS :
12.5% of the gross amount of these rentals to the
Government
the owners of commercial buildings have to pay VAT (12.5%)
the property tax payable each semester is usually passed
on to the tenants and varies according to the rental value
assessed by the Municipality (between 200 and 500 US Dollars
per year).
the ground rent is payable in July of each year to the
Government for the urban areas, being 2% of the market value
assessed by the Government on each lease.
There are no income taxes, no capital gains taxes, no death
duties, no capital taxes.
Vanuatu also has the necessary legislation to facilitate the
setting up of any kind of “off shore” company.
All these factors further enhance a quality of life which is,
without doubt, universally acknowledged by all the people in
the country, whatever their background.
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