Overview – Why invest in Vanuatu?
The country boasts an advantageous tax regime which is enhanced by several unique features when compared to other finance centres:
• There is no income tax in Vanuatu, no withholding tax, no capital gains tax, no death duties and no exchange controls. Money is easily transferred in all major currencies.
• Vanuatu financial centre has been in operation for almost 40 years, much longer than many of its competitors. Its infrastructure of lawyers, accountants, trust companies and banks is well established and this enables it to offer investors a reliable and high quality service.
• The country has a unique multicultural environment. This is inherited from Condominium times before its independence in 1980 when it was governed both by the French and the British.
There is no doubt that Vanuatu has a number of potential advantages as an investment location. The government is committed to the promotion of new investment.
The government is also interested in encouraging investment in tourism, fishing, forestry and timber products. Naturally, there are restrictions to ensure that natural resources are not over-exploited. The thrust of government thinking is to encourage labour intensive industries, using local products that will lead to import substitution. Manufactured goods exported from Vanuatu generally enjoy concessions from the Vanuatu Government. There are various accountants and lawyers in this tax environment who can help you finalising your project.
Property investment in Vanuatu
All Property in Vanuatu is registered as a leasehold title. For many new investors who are not familiar with the concept, the idea of holding a leasehold title as opposed to a freehold title can be quite unnerving. However, the system has proven itself efficient as can be seen by the rapid increase in real estate prices over the past decade.
The main urban areas of the capital Port Vila and Luganville on Santo Island were declared “public” land in 1980 under the Land Reform Act (Cap 123) at the time of Independence. The Minister of Lands is the Lessor in the urban areas, and for many rural leases where the customary ownership is not yet established. In these urban areas many leases are 50 years from their creation or from Independence on 30 July 1980. Outside of these town areas nearly all new leases are registered for 75 years.
There are no restrictions on foreigners buying property in Vanuatu. A non-citizen may be required to provide a “financial reference” and a “professional reference” from a local firm for urban purchases, but that is the only distinction made between citizen and non-citizen buyers. There is no requirement to obtain a Vanuatu Investment Promotion Authority (VIPA) Investor’s Certificate or a business licence to buy property in Vanuatu, unless it is intended that business will be done locally.
There is no requirement for property owners or holders of Vanuatu residency permits to physically reside in Vanuatu.
The key things to remember when purchasing land in Vanuatu, is that unlike some other countries there is stamp duty or land tax (7%), chargeable on property purchases. Most properties will be advertised in AUD or Vatu and include the VAT (which will be paid by the vendor) but not the stamp duty which is payable by the purchaser.
Can anyone purchase property in Vanuatu?
Are Lots at The Point Marina sold as Leasehold or Freehold?
How long is the term of the Leasehold?
What happens at the end of the Lease?
What are the costs of purchasing property in Vanuatu and at The Point Marina?
When purchasing property in Vanuatu you will have lawyers’ fees of around 0.5% of the purchase price or by negotiation. Stamp Duty is 2% of the purchase price and Government Registration fees are 5% of the purchase price.
The Point Marina owners have 3 simple ongoing costs :
- Body Corporate fees – which include common power and water, security, maintenance of public area grounds and services, public indemnity insurance, insurance on public area items such as fencing, entrance gates, lighting etc
- Berth Owner fees – for share of the costs associated with the running of the marina.
- Annual Lease Rent payable to the Lessor which will be set at VT40,000 per year for the first five years
How do I secure a marina berth licence?
How does finance on purchase work?
Mortgages are registered on the leasehold titles as they would be on freehold and leasehold titles in other countries. When a mortgage is taken out on a piece of land the Lessor needs to provide a consent to mortgage. For the leases for The Point Marina subdivision we have set an agreed fee with the lessor of VT20,000. Note any variations or amendments also require a consent so each time there is a variation to the mortgage a fee of VT20,000 would be paid to the lessor if their consent is required.
What is the standard deposit when signing a contract to purchase at The Point Marina?
Is it easy to rent out property in Vanuatu?
The rental market in Vanuatu is strong and generally offers higher returns than Australia or New Zealand. Quality houses can also be offered for short term / holiday rental achieving higher letting fees.
Are there good builders in Vanuatu?
Vanuatu offers several companies with qualified builders who can offer very good standard of building and finishing. As in any other country it is important to see previous work/buildings they have done before engaging anyone to build your house.