Non-nationals buying property in Tobago - update

[Clyde Alleyne]

In yesterday's reading of the government's 2009/2010 budget, the Minister of Finance stated the following:

"Mr. Speaker, while the Government takes steps to attract foreign investment to spur economic activity in Tobago, we also recognise the need to discourage speculation that will artificially inflate the land prices on the island as well as protect the landownership rights of nationals of Trinidad and Tobago. Therefore, following extensive discussions with the Tobago House of Assembly and other stakeholders, six regions on the island have been designated as development areas: Arnos Vale and Culloden Estate, Bacolet Estate, Buccoo and Golden Grove Estate, Englishman’s Bay, Lowlands and Diamond Estate and Mount Irvine and Grafton Estate. These locations were selected because these are sites on which resort development is already permitted. The total area selected is approximately 0.05 percent of the land mass of the island.

Mr. Speaker, we have also reviewed the application conditions and procedures that govern the approval for licences for acquisition of land in Tobago. The application instructions which had previously contained twenty-three requirements have been reduced to a total of eleven. In addition, foreign investors will be granted conditional licences on satisfaction of predetermined criteria while awaiting regulatory approvals which will enable them to commence construction. The objective is to reduce the processing time for the grant of the licences. The full list of application documentation will be available to the public shortly."

So nearly three years after the government stated that non-nationals required a licence to purchase property in Tobago (thereby bringing non-national property purchases and non-national market dependent development projects to a screeching halt) and with no news since then about the application process and criteria, at last there has now been some visible progress.

There are now some defined areas in Tobago "where resort development is already permitted" for which licence applications will be entertained - that suggests that applications for areas not named eg Castara, Charlotteville and Parlatuvier will not be entertained. Unfortunately, no-one knows when the procedure and criteria will be published. Knowing the glacial speed that the government moves at, it's anyone's guess when the forms will be available and the process put in place. So as usual, don't hold your breath. Things will happen when they happen.

And in the meantime, if you are a non-national wishing to make a purchase in Tobago, don't make a commitment or make a deposit no matter what the owner or real estate agent tells you, until you are certain that the licence process has been fully operationalised - even then, make sure that there is a clause in the purchase agreement that allows for delays in the approval process to change the close date. Don't be caught with a 90 day close date in the purchase agreement, on the assumption that your licence application must be approved within that time. Hope this helps,
Clyde

[HelenaVM]

Hi Clyde

Do you know if the same criteria applies if you are selling a house that is already built? My boyfriend and I have a villa in Bon Accord which we rent out. If we wanted to sell it, we would need to sell to a local at present, but how is that set to change, do you think?

Thanks

Helena

[Clyde Alleyne]

Hi Helena,
the rule applies to a non-national ie "foreigner" who is buying a property in Tobago - whether land only or land with a building already erected. It does not apply to the seller.

From your question, I am assuming that you are currently a non-resident, non-national villa owner (with your boyfriend who I assume is the same). The bottom line is, if you already have a property in Tobago you don't need to retro-apply for a license, and the rule only kicks in if you wanted to sell the property to a non-national. Selling the property to a local does not fall under the new rules and is OK. Even selling the property to a non-resident national (ie someone who holds a T&T passport but lives abroad) is OK.

Unfortunately, there was no mention of Bon Accord in the list of areas for which license applications would be approved for non-nationals, so unless this changes, you would only be able to sell to a T&T citizen, whether he lives in T&T or overseas.

Hope this answers your question.
Clyde