Cayman Islands: Real Estate

Last Updated: 20 August 2008


Title to real estate in the Cayman Islands is evidenced by registration at the Cayman Islands Land Registry where parcel files are open to public inspection. Registration is of title rather than of transactions but some information on previous transactions will be available in the parcel files kept for each title.

Real estate is held as freehold, leasehold or under a strata title:

  1. a freehold title is held by the registered proprietor indefinitely;

  2. a leasehold title is held by the registered proprietor for the term of the lease;

  3. the Strata Titles Law (2005 Revision) provides for the subdivision of land to create strata lots, each of which is registered as a separate strata title (which is held by the registered proprietor indefinitely). Strata titles are also used for office buildings, shopping centres, but most commonly for residential condominium developments.

A major advantage of this system is that all registered absolute titles are effectively guaranteed by the Cayman Islands Government and title insurance is therefore not commonly used and generally not available.

Ownership Requirements

There is generally no restriction on foreign ownership of real estate in the Cayman Islands but there are legal restrictions designed to protect local businesses which have the effect of restricting foreign investment in commercial real estate. The following restrictions apply:

  1. a foreign company wishing to purchase or lease real estate must be registered at the Companies Registry as a foreign company;

  2. any foreign company or Cayman company which is foreign controlled wishing to own an income producing real estate investment must be licensed under the Trade and Business Licensing Law (2007 Revision) and the Local Companies (Control) law (2007 Revision);

  3. any foreign company or Cayman company which is foreign controlled wishing to take a lease of premises to carry on a business from those premises must obtain a licence under the Trade and Business Licensing Law (2007 Revision) and Local Companies (Control) Law (2007 Revision).

On registration at Companies Registry a foreign company or Cayman company which is foreign controlled can own, occupy and give security in respect of real estate provided its memorandum and articles of association permit it to do so.

Registration Of Title

All land in the Cayman Islands is identified and numbered and a public record sheet relating to it is kept at the Land Registry.

The land register for a parcel of land or lease and all documents mentioned on it or contained in the parcel file are open to public inspection and indicate:

  1. whether the title is absolute or provisional;

  2. whether the land is private or crown land;

  3. the name and address of the owner;

  4. details of any matters to which the land is subject; and

  5. the size (acreage) of the land.

The system enables actual registration of a title or other interest in land to be reasonably straightforward. However, the precise terms of any real estate transaction are very important and are almost always incorporated in a detailed written contract, which is usually prepared by the parties' attorneys, and signed by the parties.

We will be pleased to draft such contracts for clients and we would always strongly recommend that we be consulted by clients before signing any such contract whoever it has been prepared by. A typical real estate purchase would involve an initial sales agreement (usually prepared by the attorney for the seller) being signed by the parties with the buyer paying an initial deposit (usually 10%) towards the purchase price. This would be followed by a closing at a mutually agreed date when a transfer of title document will be handed over to the buyer's attorney in exchange for the remainder of the purchase price. The transfer of title document is registered at the Land Registry (usually by the purchaser's attorney unless there is a mortgage involved) and the register for the property concerned is amended by the Registrar deleting the name of the seller and inserting the purchaser as the new owner.

Clients should be aware of the potential risk of signing any agreement, however informal, relating to real estate before we have had the opportunity to review it. This is because under Cayman Islands Law once parties have committed certain basic terms to writing and signed them they may well find this enforceable against them despite the fact that there are important provisions which remain to be finalised and notwithstanding that other important arrangements have not been made.

Strata Titles

Generally, condominium developments in the Cayman Islands are stratified pursuant to the Strata Titles Registration Law which regime provides for a parcel of land to be divided horizontally or vertically into units or strata lots, each unit or strata lot to be held in a separate, registered ownership title.

The Strata Titles Registration Law also provides a convenient regime to govern the management of the parcel of land and the legal relations between the various unit owners. Similar schemes are known elsewhere as unit titles or condominiums.

The law provides for the registration of a basic plan (a strata plan) showing the boundaries of the units within the strata parcel. Upon registration of a strata plan, a body corporate with separate legal personality (the "Strata Corporation") automatically comes into existence. Separate land registers are then issued for each unit (a "Strata Lot") within the strata parcel, each carrying an entitlement to participate in the Strata Corporation and to share in those areas of the strata parcel which are not allocated to any particular strata lot (the "Common Property").

The Common Property is managed by the Strata Corporation which also takes on limited responsibilities in the maintenance and governance of the Strata Lots. The strata structure provides a liberal regime for the strata lot proprietors to make their own rules for the central governance of the strata scheme. This is done through the medium of by-laws which are enforceable between the Strata Corporation and the Strata Lots owners and between the Strata Lot owners amongst themselves. Strata lots can be bought and sold in basically the same way as other real estate as outlined above. While most strata lots will have what is effectively freehold title there are, however, some developments where lot titles are leasehold.

On a purchase of a strata lot, the owner automatically becomes a member of the Strata Corporation. Normally the Strata Corporation will be run by an executive committee of several owners elected by the general membership.

Ownership of a strata lot will involve periodic payment of Strata Corporation fees to cover maintenance of common areas, building insurance and other expenses. Details of such strata fees should be obtained before completion of the strata lot and any arrears deducted from the balance of the purchase price. Any prepaid fees should be pro-rated as between the buyer and the seller as at the day of closing.


Freehold, leasehold and strata titles may be leased on a long or short term basis. Leases for a term of more than two years must be registered at the Land Registry whilst leases for less than two years can be registered voluntarily. A separate register is opened for leasehold interests and a note of the lease will be made in the incumbrance section of the land register for the freehold title. Ad valorem stamp duty is payable on all leases.

Planning Law/Zoning

The Development and Planning Law (2008 Revision) and the Development and Planning Regulations (2006 Revision) provide control mechanisms in connection with the development of land. The Central Planning Authority for Grand Cayman and the Development Control Board for the sister islands (Cayman Brac and Little Cayman) have the day to day control over applications made to obtain planning permissions for development and take enforcement actions, when necessary. Planning permission is required for any development of land or change of use.

Development of land includes:

  1. the carrying out of building, engineering or other operations in, over or under any land;

  2. materially changing the use of any land or the use of any building on the land;

  3. subdividing land.

The following exclusions from the above are:

  1. the enlargement, improvement or other alteration of a dwelling house within limitations;

  2. the erection or construction of gates, fences, walls or other means of enclosure not being with any setback adjacent to the sea, not exceeding three feet six inches in height and not constructed of sheet metal;

  3. the carrying out of works for the maintenance, improvement or other alteration of any building if the works affect only the interior of a dwelling house and do not materially affect the external appearance of the building.

Applications are made to the Central Planning Authority for Grand Cayman and the Development Control Board for the Sister Islands (Cayman Brac and Little Cayman).

Time Sharing

Cayman Islands' real estate law has not yet established a statutory framework for time sharing. It is not therefore possible to guarantee time share interests in real estate in the same way as an outright registered title. It is therefore advisable that clients consult us on any proposed time share purchase before signing any agreement.

Powers Of Attorney

Powers of Attorney which are intended to authorise dealings in real estate are required to be in the form prescribed by the Registered Land Law (2005 Revision) and must be stamped and registered at the Cayman Islands Land Registry.

Real Estate Taxes

There are no taxes payable when you sell real estate in the Cayman Islands. However, stamp duty is payable (subject to certain exemptions) when you buy, lease or mortgage real estate. Stamp duty is payable on:

  1. the transfer of land or strata title;

  2. the transfer or grant of a new lease;

  3. any agreement or memorandum of agreement for the purchase of land or strata title and the assignment of any rights under such an agreement;

  4. a debenture or mortgage of land.

Generally, the stamp duty in relation to the acquisition of freehold or leasehold land is paid by the buyer and for the grant of a lease, by the tenant. This, however, is negotiable between the parties.

The current rates of stamp duty payable are set out below:

Agreements For Sale Or Purchase Of Real Estate

Stamp duty is payable on an agreement or memorandum of agreement for the purchase of land or strata title. Such agreement may be stamped with a minimal fixed duty of CI$100.00 or with ad valorem duty, depending on whether the agreement contains or grants a right of possession. If the agreement confers or does not specifically prevent any right of occupation ad valorem duty is payable. Where full ad valorem duty is paid on the agreement no additional duty will be payable on the transfer, provided the transfer has been executed in conformity with the agreement and relates to the same real estate as the agreement. If there is an assignment of any rights of an agreement relating to the purchase of land or strata title, depending upon the terms of the assignment, either varying, fixed or ad valorem duties are payable

Transfers Of Land

The current rates of stamp duty payable on a transfer of land vary from 0% to 7.5% depending on whether the buyer is a Caymanian citizen and the location of the real estate. Normally the price paid for the real estate is accepted as the market value but the stamp duty authorities are entitled to (and sometimes do) carry out their own valuation.

There is an equivalent duty payable on the transfer of shares in a corporation owning real estate in the Cayman Islands where a change in beneficial ownership is involved. This is called share transfer tax and is payable on the issue or transfer of equity capital in a land holding company, as referred to in the Land Holding Companies Share Transfer Tax Law (2007 Revision).

There are a few exemptions, which include transfers for natural love and affection between certain family members, transfers to successors entitled under an estate and transfers which do not bring about a change in beneficial ownership. However, all stamp duty exemptions are at the discretion of the Financial Secretary of the Cayman Islands.


The current rates of stamp duty payable on a lease agreement or a lease are:

If the term is less than one year

5% of the aggregate rent

If the term does not exceed five years

5% of the average annual rent

If the term exceeds five years but does not exceed ten years

10% of the average annual rent

If the term exceeds ten years

20% of the average annual rent

If the term exceeds thirty years

The same duty as on a sale based on the full market value of the real estate

Legal Charges

Stamp duty is payable on any mortgage (legal or equitable) or charge of immoveable property. The current rate of stamp duty is either 1% or 1.5% depending on the sum secured. Stamp duty at the rate of 1% is payable if the sum secured is less than CI$300,000.00 and where the sum secured is more than CI$300,000.00, stamp duty at the rate of 1.5% of the sum secured will be payable.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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