One of the basic selling points to investors considering the purchase of property in the Cayman Islands is that the territory has a land registration system whereby Government guarantees title.

Before the UK Government sponsored the Land Adjudication process in the 1970s, Cayman authorities registered deeds (documents associated with land transactions) rather than the land itself. In the past 30-plus years, land registration has brought a certainty and finality to many questions of land ownership and provided confidence in land tenure.

The local Government entity in charge of land registration, surveying, geographic data and management of government facilities is the Cayman Islands Land & Survey Department, part of the Ministry of District Administration, Works, Lands and Agriculture. Within the Department, the Land Registry records the details of all land ownership information in Cayman, together with a Registry Map, which indicates and/or defines the boundaries of each individually owned parcel of land. The Registrar of Lands is responsible for maintaining the Land Register and Registry Map, which are governed by the Registered Land Law, Registered Land Rules and Registered Land Regulations. The Land Register and associated documents are public records.

The Land Registry is responsible for recording all land transactions in the three Cayman Islands, in a database including about 27,000 parcel registers defining ownership and other interests in land such as leases, rights of way and mortgages/charges.

Also within the Department, the Chief Surveyor heads the Survey Section and is empowered to direct, supervise and control all surveys, including the authentication of legal cadastral surveys. He regulates the land surveying practice and is the authority for the preparation of publication of the official maps of Cayman.

The foundation of Cayman’s land registration system is the legal cadastre. Cadastral surveying is the process of mapping property boundaries to provide an unambiguous definition of the parcel extent and to maintain the Registry Map. Cadastral surveying is a legal requirement in the land registration process and can only be undertaken by licensed land surveyors and government surveyors in accordance with the Land Surveyors Law and Land Survey Regulations for the Purposes of the Registered Land Law.

The English term ‘cadastre’ was borrowed from French, and the origins of the term are traced through Old Italian and Greek. The Greek term ‘katastichon’ is translated variously as list, register or notebook, and its literal meaning is ‘down the line’ in the sense of ‘line by line’. Even though the definition of cadastre stipulates that the official register is maintained as a basis for taxation, Cayman does not have any property tax.

Costs to consider when buying property

In addition to the sale price of a property, there are other costs associated with real estate transactions that buyers and sellers must consider.

Typically, a buyer is responsible for bank fees, stamp duty and land registry fees. Meanwhile, the seller is responsible for the commission charged by the real estate broker. Most of the fees vary according to the value of the property at hand. If an attorney is retained, the party hiring the attorney would be responsible for that fee.

Buyer’s costs

Bank fees – Usually, 3 per cent of the amount borrowed: 1 per cent to attorney, 1 per cent to bank, 1 per cent to government as stamp duty if a mortgage is required. If the mortgage is more than $300,000, the stamp duty is 1.5 per cent. (Interest rates for real estate lending are based on prime U.S. rates, plus 1-3 percentage points. Typically, mortgages require a 10-35 per cent down payment, and are paid back over a term of 10-40 years, depending on the borrower.)

Stamp duty – Varies up to 7.5 percent of the purchase price (not including ‘chattels’ – things not attached to the property, such as furniture).

7.5 per cent – Seven Mile Beach area, regardless of buyer’s Caymanian status

6 per cent – all other areas, including Cayman Brac and Little Cayman, if the buyer is not Caymanian or is a company

4 per cent – all other areas, including Cayman Brac and Little Cayman, if the buyer is Caymanian

2 per cent – all other areas, including Cayman Brac and Little Cayman, if the buyer is a Caymanian first-time buyer, for bare land purchases between $50,000-$75,000 or for residential purchases between $200,000-$300,000, for owner occupation

0 per cent – all other areas, including Cayman Brac and Little Cayman, if the buyer is a Caymanian first-time buyer, for bare land purchases up to $50,000 or for residential purchases up to $200,000, for owner occupation

Land registry fees - $50 for official search, $50 for transfer to buyer’s name, $100 for purchase agreement registration

Seller’s costs

Real estate broker’s commission – CIREBA rates vary from 4-10 per cent, and are paid according to the price in the Listing Agreement

10 per cent – Price less than $95,000

7 per cent – Price between $95,000-$495,000

6 per cent – Price between $495,000-$995,000

5 per cent – Price between $995,000-$9.995 million

4 per cent – Price of $9.995 million or greater