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TURKS AND CAICOS ADVANTAGES OF A 99 YEAR LEASE

The developer is marketing the Resort Residences at 50% below current market value in the Turks and Caicos Islands.

The real estate Transfer Tax in the Turks and Caicos Island is currently 9.75%. The developer has negotiated the Transfer Tax from 9.75% down to 3% on the transfer of the Ninety-Nine Year Lease

For example. The average price for a one bedroom Ocean View resort Residence is $500.000 as opposed to the current price at Caicos Beach Club of $245.000US

The Transfer Tax on the $500.000US purchase price would be $48.750US paid to the Turks and Caicos Island Government at closing as opposed to the Transfer Tax on a Caicos Beach Club Unit of $7.350US - an out of pocket saving at closing of $41.400US

The figure compounded at 10% interest over the 99 year is in excess of $200 million US.

The Resort Residence is not an individual´s primary residence, but is in fact, an investment property. The average term of ownership in investment properties is between 5-10 years

Why then would someone want to pay an additional $41.400US at completion to own a property between 5-10 years.

in addition, if someone were to purchase the freehold they would fall under the Developers Development Agreement with the Crown Colony Authorities, which we call an "Umbrella of Rights": A few examples of rights that would be lost are as follows:

The Purchaser would have to pay 35% import duty on the furniture in their apartment(s)

The Purchaser would pay the higher Transfer Taxes - as illustrated above

The Purchaser would pay Higher Individual Insurance Rates

The Purchaser would have to pay the Resort Residence operating expense separately and on their own, as opposed to the expenses paid out of the rental pool. Not only would an owner have to pay the bills on their own, they would also pay the bills at a higher rate both by economies of scale (i.e.: the more people that pay the same bill in the rental pool lowers the cost ser person) but the rate at which items are charged will be higher, i.e. an electric bill paid for an apartment owned under a 99 year lease in the rental pool is paid at the discounted Developer Rate negotiated in the Development Agreement which is 2.5 time lower than the regular rate charged

If Freehold, there would be no rental pool as everyone would have to pay their own electric, water etc. In the rental pool, all expenses are pooled and paid by the Management Company on behalf of the owners. Also the income is pooled and everyone receives his / her Pro-Rata share as opposed to only receiving income on your individual Resort Residence.

The developer has th right to import unlimited foreign labor to keep costs down, which labour can only be used to operate and maintain te Resort Residences operating under the Development Agreement.

Although there are currently no annual real estate taxes in the Turks and Caicos Islands, no one ever knows if this may change in the future.In the Development Agreement, if any taxes whatsoever are ever imposed, the Developer has a 25 year exemption from these taxes which commences to run from the Completion of Phase I. Compare this, to say with the 3% annual real estate taxes in Spain

These are just a few of the benefits of a 99 year lease and the protection of the Developers Development Agreement as opposed to Freehold ownership which does not carry these rights. In addition, every time a cost is increased the annual return on investment is decreased.

At Caicos Beach Club the Resort Residences in the rental pool are extremely profitable, based upon conservative projections. Due to the tax free environment, the Resort Residence Owners are not responsible for annual profit taxes and, when the Resort Residence is sold, there is no tax on the profits received from the sale (even though the local currency is the US Dollar). In addition, over the last Seven Years, Condominium prices have recognized a minimum 10% rise each and every year

INVESTMENT INFO       ADVANTAGES OF A 99 YEAR LEASE

About the Turks and Caicos Islands

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