Real estate ownershipi Planning
The following legislation deals with planning control in connection with the development of real estate: the Development and Planning Law (2017 Revision) (DPL), the Development and Planning Regulations (2017 Revision) and the Development Plan 1997.
The DPL also establishes a central planning authority for Grand Cayman as well as a Development Control Board for Cayman Brac and Little Cayman. These authorities generally review and consider applications to obtain planning permission for development as well as taking enforcement actions (where deemed necessary). Planning permission is required for any development, change or use of land, including carrying out building, engineering or other operations in, on, over or under any land; materially changing the use of any land or the use of any building on the land; and dividing land.ii Environment
There is no current law in the Cayman Islands dealing with the environment; however, it is generally accepted that the polluter pays.iii Tax
In addition to registration fees that are payable in connection with the conveyance of real estate, stamp duty is payable on the transfer instrument for each piece of real estate purchased. Pursuant to the Stamp Duty Law (2013 Revision) (the SD Law), stamp duty on a conveyance or transfer of real estate is payable on 7.5 per cent of the consideration. Consideration, for the purposes of the SD Law, is the higher of either the purchase price paid for the property or the market value of the property conveyed or transferred. Further, the market value of any property is the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm's-length transaction after proper marketing, where the parties have each acted knowledgeably, prudently and without any compulsion.iv Finance and security
The most common forms of security granted over real estate are as follows:
- legal charges registered over land;
- legal or equitable charges over shares in a company that holds land;
- debentures creating fixed and floating charges over assets held by a company holding land; and
- assignments of rent.
Legal charges over property must be registered on the title for the land at the Cayman Islands Land Registry (the Land Registry).
Debentures creating fixed and floating charges are noted on the title for the land at the Land Registry, but are not capable of being registered in their own right.
Charges over shares are recorded on the Register of Shares for the land holding company, and an assignment of rental income is created by way of a deed. Notice of the assignment must be given to the tenant to perfect the securities.