Whether you’re selling or buying property in the Caribbean, the UK’s decision to leave the EU will have an impact on the financial aspect of your transaction. Provided below are two examples of this.
You received and accepted an offer of JMD $20,000,000.00 for your house in Jamaica. Prior to Brexit you could expect to receive approximately £111,111.11 at an exchange rate of JMD $180.00 to £1.00 before deductions. Following the Brexit vote, that figure now becomes £104,294.47 at an exchange rate of JMD $163.00 to £1.00 before deductions.
Tip for Sellers
While the pound sterling remains weak, motivated sellers of property in the Caribbean should give serious consideration to reducing the asking price for their properties. This is likely to increase interest from potential buyers and the weak pound means that you will generate more proceeds from the sale of your property.
Having identified that ideal property to purchase in Barbados, you make an offer of BBD $500,000.00 that is accepted by the seller. Prior to Brexit, you would require the equivalent of approximately £166,666.66 at an exchange rate of BBD $3.00 to £1.00 plus legal fees and expenses. Since Brexit, you now need to find approximately £200,000.00 at an exchange rate of BBD $2.5 to £1.00 plus legal fees and expenses.
Tip for Buyers
Buyers of property in the Caribbean should give serious consideration to using the services of a foreign exchange company to secure currency at fixed rates whenever these are favourable, which they usually will be over local banks and building society rates.
The information contained in this article is provided solely for the purpose of demonstrating the current impact of Brexit on Caribbean property sales and purchases. Once the uncertainty of Brexit is removed, the pound sterling is likely to strengthen, so it is vitally important that you are aware of fluctuating rates of exchange before committing to sell or buy property in the Caribbean.
Article by Maureen Smith, Founder of Tropical Connections Ltd.