Land Investments in Vanuatu

Land prices have been increasing steadily in Vanuatu over the last decade, making real estate investments highly attractive. Vanuatu is currently one of the best bets for those people in the "civilized" world who are dreaming of escaping from the rat race into the tropical paradises of the South Pacific.

10 reasons why land prices are going up in Vanuatu

Here are 10 reasons why land prices - especially waterfront land prices - have been moving steadily upwards in Vanuatu.

1. Many investors turn to real estate when the world currency markets become unstable, and the Asian recession and the hand over of Hong Kong to China generated considerable interest in Vanuatu.

2. The political and social problems in Papua New Guinea, the Solomon Islands, Fiji and New Caldedonia have turned investors away from these areas and Vanuatu is a highly viable alternative.

3. The Government of Vanuatu openly encourages foreign investment and has passed new legislation - such as the Strata Titles Act - to make it easier for people to invest with a reasonable chance of a good return.

4. The government has streamlined the Foreign Investment Board, Customs, and Immigration proceedures to make the formalities of investing and taking up residency as painless as possible.

5. Unlike Fiji and New Caledonia, the nearest compeditors in the tourism sector, Vanuatu is free of ethnic or colonialist problems. The small population is 99% ni-Vanuatu and while not everyone gets along all the time, relations between the island people are about as good as you can find.

6. Crime is low, people friendly, and nobody has any reason to even consider terrorism.

7. The ni-Vanuatu people are happy to have real estate investors come to Vanuatu because the custom owners are the only ones who can own land. All foreigners must lease land from them and that, of course, means that they have an income - even if it is very modest.

8. Investors quickly realize that the land leasing arrangements actually work very well in Vanuatu. All leases must be registered in the central government Land Records Department. In the urban areas of Port Vila and Luganville, the government itself becomes the lessor on behalf of the custom owners. The government courts protect the interests of both the land owners and the lessee as efficiently as any land dispute court in the Western world and often better.

9. Leases are generally 50 years for residential property and 75 years for commercial property and the property lease can be renewed if, for example, the property is subdivided.

10. Waterfront propery is always a limited commodity, especially in the best locations and it has been slowly dwindling as new homes, resorts, hotels, and businesses are built.

An Excellent Land Ownership System:

Until they understand how the system works, investors are sometimes concerned with the idea of leasing land as opposed to the Western concept of land ownership.

In fact, Western concepts of land ownership are hardly accurate. In most countries governments actually lease the land to individuals and companies but they call the lease payments "property taxes." If the "owner" fails to pay whatever taxes are assessed on the property, the government can and does confiscate the land.

By contrast, in Vanuatu, the government can't take the land from the indigenous people under any circumstances. But the government can and does act as an efficient and fair mediator between custom land owners and foreign investors.

The mere fact that real estate prices have been rising rapidly in Vanuatu proves their system works and works well.

You do not have to be a resident of Vanuatu or have employment in Vanuatu to purchase commercial or residential property and generate income from this property. You will not pay income taxes in Vanuatu on any income that your investment earns although the company will have to participate in the sales tax process and pay other government fees such as businesses licences etc.

The Process of buying land in Vanuatu:

2. Pay the deposit..

3. Sign the Lease Transfer.

4. Settle the transaction.

5. Pay a Stamp Duty of 2% to the Government.

6. Register the transfer at the Lands Records Department and pay 5% registration fee.

7. Pay Solicitor's fees (Negotiable, usually 1%). This step can be avoided, if desired, by allowing TransPacific Real Estate to complete the transaction.

These costs are not applicable if the current lessee is a company or trust and the buyer simply buys the shares of the company or buys the trust with all its assetts.

Tax Advantages:

Vanuatu has no Inheritance Tax and no Capital Gains Tax.

You can purchase the lease as a Vanuatu International Company or as a Trust to maximize tax benefits to yourself if necessary.

You can do the transaction in any currency agreeable to both parties.

If you decide to rent the property to generate income, you will be required to collect 12.5% sales tax from your tennant and pay this to the government.

The real reason people invest in Vanuatu

There is a reasonable opportunity to make money by investing in Vanuatu, but most people who invest in waterfront properety in Vanuatu are seeking the relaxed, friendly, natural atmosphere of this tropical South Pacific country.

Successful investors are often international business people who wish to establish a foreign residency for tax purposes, sport fishers, SCUBA divers, or cruising yachties who come for a holiday fall in love with the place and decide to settle down.

People  who come to live in Vanuatu are seeking the lifestyle, the culture, the adventure, the fishing and diving and walks in wilderness. They want a place to live where nobody hassels them and the living is easy.

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