Most writing about Grenadian property focuses on buyers. Sellers face their own set of costs, and the largest of them, the property transfer tax, often surprises people who bought years ago without thinking about the exit. For a non-national seller, the combination of transfer tax, agent's commission and legal fees can take a substantial share of the sale price before a single dollar leaves the island.
This guide sets out what sellers pay, who pays it, how to estimate net proceeds, and the preparation that makes a sale faster and cheaper. Rates and rules change through budgets and amendments, so use the figures as a starting point and confirm them with your attorney and the Inland Revenue Division before you agree a price.
Property transfer tax: the seller's largest cost
When land or buildings change hands in Grenada, a property transfer tax is payable to the government on the value of the transfer. The legal burden falls on the seller, and the rules are designed so that it cannot simply be shifted to the buyer in the agreement. The tax is calculated on the sale price or the market value, whichever the authorities accept, after any allowance the law provides.
The rate depends on the circumstances of the seller. Grenadian nationals, and citizens of other OECS member states, are commonly charged 5%, while non-nationals pay 15% of the taxable value, with the first EC$20,000 or so of value exempt. Some transfers, such as certain gifts within families or transfers connected with approved investment projects, may be treated differently. The schedule has been amended over the years, so ask your attorney for the rate that applies to you on the date of the sale.
Grenada has no separate capital gains tax on the sale of a private home, so the transfer tax is the main tax consequence of selling. It applies whether you make a gain or a loss, which is why it matters so much to people who sell soon after buying.
The other costs of selling
Estate agent's commission. If an agent finds the buyer, the seller normally pays commission out of the proceeds at a percentage agreed in the listing agreement. Rates vary by agent and property type, and land often carries a higher percentage than houses. Agree the rate, what it covers and whether the listing is exclusive before marketing begins.
Seller's attorney. Your attorney reviews the buyer's agreement or prepares it, deals with the buyer's attorney's requisitions on title, handles completion and pays the transfer tax. Fees are usually a percentage of the price or a fixed amount, plus VAT.
Clearing arrears. Property tax, estate fees and utility bills must be paid up to completion. Any arrears, interest and penalties come out of your proceeds.
Discharging a mortgage. If the property is mortgaged, the loan must be repaid and a release registered. Ask the bank for a redemption statement early, including any early repayment charges.
Pre-sale repairs. Fixing obvious defects, such as roof leaks or a failed pump, before listing often costs less than the discount a buyer will demand after an inspection.
A worked example for a non-national seller
Consider a foreign owner selling a south-coast house for US$500,000, of which US$20,000 is furniture listed separately in the agreement. The transfer tax is calculated on the real property, so on roughly US$480,000 at the non-national rate of 15%, after the small exemption, the tax would be about US$71,000.
If an agent introduced the buyer at, say, 6% of the full price, commission would be US$30,000. Legal fees at around 2% plus VAT add roughly US$11,500. Clearing a year of property tax, utility bills and incidentals might add a few thousand more. On these assumptions the seller keeps somewhere around US$380,000 to US$385,000, about three-quarters of the headline price.
A Grenadian national selling the same house would pay transfer tax at 5%, about US$24,000, leaving a noticeably larger sum. The example is only illustrative: rates, allowances and commission levels must be confirmed for your actual sale. Its point is that sellers should never treat the asking price as the money they will receive.
Preparing for a sale
Sales go faster and cost less when the seller has done the groundwork before a buyer appears. A sensible sequence:
- Find your registered deed and survey plan, and ask your attorney to check that the title is clean and that the deed matches the land on the ground.
- Pay all property tax up to date and collect the receipts for the past several years.
- Gather utility bills, estate fee statements and any approvals for buildings or extensions on the property.
- Commission a valuation if you are unsure of market value; a realistic price shortens the time on the market.
- Ask your attorney for an estimate of transfer tax, legal fees and other deductions so you know your net figure.
- Agree commission and terms with one or more agents in writing.
- Prepare an inventory of furniture and equipment included in the sale, with values, for the sale agreement.
- Tidy up the practical side: service the pump, clear gutters, fix leaks and cut back the garden before viewings.
Furniture, chattels and honest valuations
Furniture, appliances and movable items are not real property, and their value is generally separated from the price of the land and buildings in the sale agreement. That affects both the seller's transfer tax and the buyer's stamp duty and licence fee, which is why buyers and sellers sometimes press for a high furniture figure.
The temptation to inflate the furniture value, or to under-declare the price, should be resisted. Tax authorities can challenge values that look unrealistic, and the consequences include reassessment, penalties and delays to registration. A false price on a deed also undermines your own position if there is a dispute later.
A reasonable approach is a genuine inventory, with values a professional valuer or an honest second-hand market would recognise. Your attorney will advise on what is acceptable.
Getting the money out of Grenada
Keep records from the purchase. Banks will ask for evidence of where the money came from and how it entered the country. Keep the transfer records and deed from your original purchase.
Allow time for transfers. Large international payments involve compliance checks by banks. Discuss timing with your bank and attorney before completion.
Currency. Proceeds may be held in EC dollars or US dollars depending on how the buyer pays. The EC dollar is pegged at EC$2.70 to US$1, so there is no exchange rate risk between the two, but conversion charges apply.
Tax at home. Your country of residence may tax a gain on a foreign property even though Grenada does not. Speak to a tax adviser there before the sale, not after.
Citizenship by investment units. Units bought under the citizenship by investment programme may be subject to minimum holding periods and conditions on resale. Check these with your attorney and the developer before marketing.
Selling mistakes that cost money
Attorneys and agents describe the same avoidable errors again and again:
- Pricing on the basis of what was paid plus improvements, ignoring the current market and the transfer tax.
- Assuming the buyer will pay part of the transfer tax, then discovering it is the seller's obligation.
- Listing with several agents on unclear terms and ending up in a dispute over who earned the commission.
- Discovering title or boundary problems only when the buyer's attorney raises them, weeks into the sale.
- Leaving years of unpaid property tax to be settled at completion, with interest and penalties.
- Forgetting that a buyer who needs an Alien Landholding Licence may take several months to complete, and planning a move too early.
- Removing fixtures such as air-conditioning units, water heaters or shutters without first agreeing it in the sale contract.
Frequently asked questions
Who pays property transfer tax in Grenada, the buyer or the seller?
The seller. The law places the property transfer tax on the seller, and it is normally paid by the seller's attorney from the sale proceeds at completion. Buyers pay their own costs, mainly stamp duty, legal fees and, for foreigners, the Alien Landholding Licence fee.
How much is property transfer tax for a foreign seller?
Non-nationals are commonly charged 15% of the taxable value, while nationals and OECS citizens pay 5%, with a small exemption on the first EC$20,000. Rates and allowances have been amended over time, so ask your attorney or the Inland Revenue Division for the current figure.
Is there capital gains tax on selling a house in Grenada?
Grenada does not levy a separate capital gains tax on the sale of a private home. The property transfer tax applies instead, on the value rather than the gain. Your home country may still tax any gain, so check there too.
How long does it take to sell a property in Grenada?
It depends on price, location and the buyer. Once a buyer is found, completion often takes a few months, longer if the buyer needs an Alien Landholding Licence. Homes on the south coast generally sell faster than rural properties.
Can a seller reduce transfer tax by listing furniture separately?
Genuine furniture and movable items included in a sale can be valued separately from the real property. Inflating that value to reduce tax risks reassessment and penalties. Use an honest inventory and follow your attorney's advice.
