Our Most Frequently Asked Questions about Vanuatu Property investing

1. Are there restrictions on who can buy property in Vanuatu?

No. Provided you have the funds necessary for the purchase, you can buy property in Vanuatu. When buying land over a certain value, you are entitled to apply for a residency permit which means you can stay in this beautiful country year round.

2. Is land Leasehold or Freehold?

All land in Vanuatu is Leasehold. This situation is similar to most other countries of the South Pacific, and leasehold is also common in some areas of Australia such as Canberra. Anywhere around the CBD, in the so called urban areas, the Minister of Lands is the Lessor. Land other than urban, which in many cases has now been subdivided, has a “custom owner” Lessor. The Constitution of Vanuatu states that the maximum term of a lease is 75 years.

3. What happens at the end of the lease?

When you buy and existing lease, you purchase the remaining term, not a new 50 or 75 year period. All urban leases can be renewed for a fee. This is 10% of the “unimproved land value” (as assessed by the Government’s Valuation Unit) and administrative fees.

Land that is rural will have a different renewal fee depending on the Lessor. This can range from a simple one off payment to 2% of the unimproved land value. A renewal of lease can be negotiated at anytime at terms suitable for both lessee and lessor.

4. What Annual outgoings should I expect when I purchase a property?

If you have a property in the urban area, there are municipal rates/taxes to cover roads, refuse collection etc. All properties will incur (if they have the services) electricity, water, gas and ground rent. Ground or land rent is paid annually and is a nominal amount calculated on a square meter age basis on the unimproved value of your land. It generally runs at about AUD$300-400 per year. House and content insurance is optional.

5. Is it possible to buy apartments or shops on their own Strata title?

Yes. The Vanuatu Parliament passed the Strata Title Act in 2000 and also approved the Strata Title regulations. It is possible to strata title existing buildings and to create strata titles for new apartment and commercial buildings.

6. What other costs are incurred when I purchase a property?

Solicitor’s fees are typically around 0.5% of the purchase price, or you can negotiate a flat fee.

Stamp duty is 5% of the purchase price and government registration fees are 2% of the purchase price. Different rules apply if you buy a business or property owned in a company name. Your lawyer or accountant can advise you of this at the time of purchase.

7. Can I get finance from a bank in Vanuatu to purchase a property?

There are currently four banks in operation in Vanuatu. Bred, ANZ, Westpac and the National Bank of Vanuatu will all lend money against property. Typically, residential property will require a 20% deposit and commercial requires a 40% deposit. Bank lending criteria are similar to Australia and New Zealand.

8. Is it easy to rent out property?

Yes. Good rental properties can return up to 10% per annum or more. There are many private companies and aid organisations who rent for long contract periods rather than buying.

9. Should I use my lawyer back home or should I use a local solicitor?

A property transaction is a significant transaction, and deserves to be handled appropriately. We would strongly recommend using a lawyer in Vanuatu as they are armed with local knowledge and expertise. LJ Hooker can recommend several solicitors to meet your requirements.

10. Are there good quality builders in Vanuatu?

In Vanuatu there is a large variety of professional builders, engineers and architects, both Ni Vanuatu or foreign trained, to construct the house of your dreams. Just open the local phone book to find their details. We recommend having a look at examples of their work to establish the suitability for your needs and demands before you get them to quote on your project.

Houses in Vanuatu are typically constructed and engineered to a higher level than you would generally find in most first world countries, simply because we are occasionally exposed to cyclones and earthquakes. Just remember you will need a building inspection done and a certificate provided to insure against cyclone damage. Average construction rates are around AU$1100 per m2, but are obviously dependent on the quality, design and finishes of your proposed dwelling.

11. What are the building codes in Vanuatu

In Vanuatu you can build houses with thatched roofs if you choose. The main thing to remember is that you will need a building inspection done and certificate provided to insure against cyclone damage. This is the driving factor behind the strength in buildings here in Vanuatu. In the lease for any given piece of land there will always be conditions. These will also determine what can be built i.e. residential or commercial, setbacks from boundaries, standards of construction, methods of waste disposal etc. Generally they all protect the buyer by maintaining a reasonable standard. The key requirement is to submit plans to the local council for approval which is a simple process and receive a building permit number.