NEW – Stamp Duty on Assignments of Contract.
For new buyers looking to purchase new homes in the Cayman Islands with an assignment of contract, these assignment of contracts can offer BIG SAVINGS giving individuals a less expensive route to get on the Cayman property ladder. Most assignment of contracts can offer buyers a big Stamp Duty savings when purchasing their new home which can go along way. BUT things are about to change.
An example of an assignment of a contract is when an owner/seller of a home is about to finish construction (pre-construction) and they have already paid Stamp Duty upfront. This owner/seller may decide to assign their contract to sell to a buyer and thus the buyer takes advantage of the Stamp Duty Savings.
EXAMPLE ; AURA Residence – 2beds / 2.baths Oceanfront South Sound is currently For Sale with a Stamp Duty savings of over US$68,000.00. CHECK OUT AURA HERE
1. New Buyers have until JUNE 30th 2021 to take advantage of assignment of contracts
New buyers in Cayman welcome assignment of contracts for it’s Stamp Duty Savings. Stamp Duty on most property purchases is charged at 7.5%. These assignment of contracts can reduce the funds needed upfront due to the Stamp Duty savings associated with them to get a step up on the property ladder in Cayman. New Buyers who wish to take advantage of purchasing a home through an assignment of contract offering Stamp Duty savings has to NOW undertake this sale before JUNE 30th 2021 to collect any Stamp Duty Benefits from that contract.
Your time is NOW to purchase a new home as an assignment of contract to have the benefit of Stamp Duty savings!
2. Sellers have until JUNE 30th 2021 to assignment their contracts of sale
Sellers who are considering selling their newly built homes and wish to assign their contracts which offers Stamp Duty savings as an “incentive” to a new buyer have until JUNE 3oth 2021 to assign these contracts. The time is now for sellers to consider marketing their new properties for sale with this incentive. These new assignments of contracts must be notarized so as to convey the exact date of agreement and to show it was undertaken before JUNE 30th 2021 so a new buyer may collect any Stamp Duty Benefits from that contract.
3. A Stamp Duty “PREMIUM”
Any assignment of contract which offers a premium to the seller over the original purchase price paid is open to a Stamp Duty on the “PREMIUM”. Graph BELOW.
Mr. Seller original purchases his home for $100K. Mr. Seller assigns his contract which includes Stamp Duty savings to Mr. Buyer for $200K. The “PREMIUM” is $100K. This premium is now subject to a 7.5% Stamp Duty if the contract for sale is assigned & notarized before JUNE 30th 2021
* 4. What happens when you try to assign a contract AFTER JUNE 30th 2021
*It is IMPORTANT that if an assignment of contract with Stamp Duty savings is arranged between a seller and a buyer this assignment is NOTARIZED by a notary public confirming this assignment took place BEFORE JUNE 30th 2021. Therefore a sale of the property can continue beyond June 30th 2021 with the benefits of the assignment of contract.
AFTER JUNE 30th 2021 all assignment of contracts “dated” after June 30th 2021 will revert back to Cayman Islands Stamp Duty fees associated with all property purchases.
SO the time is now for buyers looking to purchase real estate to consider assign of contracts on new properties. for Stamp Duty savings to enter into an assignment of contract offering these savings AND for sellers considering selling their homes to offer this incentive to purchase.
***IMPORTANT NOTE – All Stamp Duty is paid in Cayman Islands Dollars currency. So it’s in buyers interests who are purchasing cayman properties in United States Dollars to calculate the correct Stamp Duty rate so there are no surprises when you are closing on your property purchase.