Buying real estate can easily be one of the largest and best investments. When buying real estate in Jamaica there are certain associated fees that must be planned for. Typically, associated fees borne by the purchaser are as follows:
Attorney Fees: On average approximately 3% of purchase price + GCT.
Sales Agreement: Half cost (this is variable, however it could be approximately 0.23%).
Stamp Duty: $2,500.
Surveyor’s Identification Report: Approximately 0.3% of purchase price.
Valuation Report: Approximately 0.3% of purchase price.
Processing Fee: Up to 6% of aggregate loan (depending on interest rate) if obtaining a mortgage from a financial institution .
Registration Fee: Approximately 0.25% of purchase price.
Letter of Possession: Approximately $15,000.
If for example you plan to buy a property valued at $20 million, it means you must budget as follows:
Attorney Fee: $690,000
Sale Agreement: $23,000
Stamp Duty: $2,500
Surveyor’s Identification Report: $60,000
Valuation Report: $60,000
Processing Fee: $1,140,000 (if loaned approx. $19 million. i.e. 95% of purchase price)
Registration Fee: $50,000
Letter of Possession: $15,000
TOTAL FEES: $2,040,500
TOTAL PURCHASE COST: $22,040,500
Essentially, as a guide it is key to plan to spend an additional 9-12% of your purchase price. While it is tempting to want to eliminate the attorney’s fee, my advice is, ALWAYS HIRE AN ATTORNEY. It is better to negotiate how much you pay than not to use the critical service of an attorney. Stamp duty and registration fee are government fees that are non-negotiable. Based on the provider of the other services you just might be able to negotiate. After all everyone wants a great deal!
Let’s talk about getting those keys! Please feel free to contact me for more details.
Winroy Williams, CIPS, MBA
CENTURY 21 Heave-Ho Properties