Purchasers should be aware that the cost to buy a house or any other type of real estate in Jamaica will cost more than the advertised selling price. Below are the various fees which a purchaser is responsible for when buying real estate in Jamaica.
- Half Cost Agreement for Sale
While it is the vendor’s attorney that usually prepares the Agreement for Sale which details the terms of the purchase, it is custom that the cost of preparing it is shared equally between the vendor and the purchaser.
- Stamp Duty
This is a government tax applied to property transactions and is currently a flat fee of JMD$5,000. This cost is usually divided equally between purchaser and seller.
- Registration Fee
These fees are payable to the government for registering the property in the buyer’s name. Registration fees are calculated based on the property’s value at the time of purchase at 0.5% of the value. This is also a fee shared between purchaser and seller.
- Legal Fees
Legal fees cover the cost of hiring a lawyer to act on your behalf in the property transaction, conduct necessary searches, and ensure that all legal requirements are met. Engaging a reliable and experienced real estate attorney is essential for a smooth and legally sound property acquisition process. The fees associated with legal services vary as it is dependent upon your attorney of choice. Generally the legal fees range from 2-5% of the purchase price.
- Survey and Valuation costs
It’s important to note that in addition to the aforementioned fees, buyers should also consider the cost of obtaining a valuation report for the property they intend to purchase. A valuation report provides an unbiased assessment of the property’s market value and is often required by financial institutions for mortgage approval. The valuation cost depends on the valuator used and may charge a fee of about 0.25%-0.30% of the value of the property.
As it relates to a survey, the benefit of it is that it identifies the boundaries of the property and advises if the layout of the physical property is in breach of the restrictions noted on the Certificate of Title. Should you be using the assistance of a mortgage in the purchase the survey report will be requested by the bank. The usual cost of a survey varies and is dependent on the surveyor as they may charge a flat fee or charge 0.3-0.5% of the value of the property.
- Letters of Possession
These are letters which are prepared to advise the relevant utility companies, the collectorate of property taxes, and just generally to anyone, advising that you are now the owner of the property purchased. This cost is a flat fee and is usually shared between the purchaser and seller.
- Fees associated with new strata units
There are some flat fees which are unique to the purchase of a strata unit. If you are purchasing a recently built strata unit, commonly called, an apartment, then you should have the following fees additionally in mind:
- Maintenance Fees – the monthly maintenance is a contribution towards the upkeep of the community and the amount varies with each apartment complex/strata. Generally, at the time of purchasing a new unit, 3- or 4 months maintenance is required.
- Contribution to cost of New Title Fee – this is a contribution sometimes requested for the new title to be generated.
- Contribution towards preparation of the By Laws – the By Law is what governs the operation of the strata and its executive. It usually includes the rules of living in the complex/strata. You would be responsible for a contribution towards the fee for its preparation.
In conclusion, purchasing real estate in Jamaica involves various fees that potential buyers should carefully consider to ensure that they have sufficient funds or access to funds to complete the transaction allowing you to navigate the property acquisition process with confidence and financial preparedness.
