Once accounting for 25 percent of all government revenue, stamp duty on land sales dropped drastically as the world economy slowed and people nearly stopped buying in the Turks and Caicos Islands.

A new law providing for fractional ownership of property is aimed at boosting sales and bringing in more money for the government.

Fractional ownership has been around for years for the purchase of yachts and airplanes, allowing people to own part of luxuries they might not otherwise be able to afford or need on a full-time basis. The TCI government, real estate professionals and luxury home owners are hoping fractional will help boost sales and revenue.

“Currently we’re under the timeshare ordinance, which is very old and outdated and doesn’t really cover fractional ownership,” said Kathryn Brown, president of the Turks and Caicos Real Estate Association. “I do believe it’s a much simpler system than timeshare and less expensive.”

Under the new law, a property that become fractional can be sold fraction at a time. That can help people who want to buy or sell now without having to round up a group of owners.

“Purchasers who come and want high end product and want their piece of paradise, they can still do so and have pride in ownership of a luxury property without the full expense and the full maintenance,” she said.

“For sellers it opens up an option that was not available previously,” she said. “For the buyer it creates greater confidence to purchase.”

Fractional ownership in the TCI now usually involves a foreign company buying a property for several individuals who own shares. When people sell shares, the government doesn’t get stamp duty on the transactions.

Under the fractional ownership law, taxes will be paid each time a fraction of a property is sold.

The new law can also help people who are having trouble selling a multi-million-dollar home, Brown said, as well as those with condominiums that aren’t moving.

“Some condominium owners are trying to get into fractional to be able to sell the properties because we do have a lot of inventory,” Brown said.

She thinks fractional ownership will be popular with young, well off professionals in their 40s.

The proposed law has been approved by the governor’s Advisory Council, and now must go before the Consultative Forum before it takes effect.

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Tuesday, 29 March 2011 09:36

Written by Richard Green, fp Turks & Caicos