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Discontinuation of The Reduction Of Fixed Deposit Placement Based On Property Purchase And MM2H Approval By Government Pension
Kindly be informed that MM2H Centre has discontinued the reduction of Fixed Deposit placement based on property purchase worth RM1 million and above in Malaysia. Also discontinued is the MM2H...
Tax-free treats: Belize is one of several countries offering sun, sea and savings to the canny UK buyer Print E-mail
Friday, 20 February 2009 15:50

As you contemplate Alistair Darling's ticking tax time-bomb, you would be forgiven for wanting to get away from it all.

The good news is that for those who have the money, there are plenty of countries providing tax breaks and incentives that will enable buyers to hang on to more of their cash.

For the seriously rich, the Caribbean - from the Virgin Islands to the Bahamas, the Cayman Islands, the Turks and Caicos and St Kitts - offers varieties of low income tax, or even none, and no capital gains for residential buyers.

Haven: Belize gives older property buyers tax breaks and has a lovely climate all year round

Haven: Belize gives older property buyers tax breaks and has a lovely climate all year round

But for the rest of us, particularly those looking to retire, there are a number of more achievable options.

The Central American country of Belize has made itself particularly attractive for the older market, with an initiative called the Qualified Retired Persons Incentive Act.

Anyone over 45 with an income of more than £1,350 a month can qualify - and so can their dependents.

Perks include the right to import vehicles free of duty and all other private assets (within 12 months). There is no capital gains tax or income tax for those who qualify.

'Belize has so much to offer,' says Ben Mason of Someplaceelse, which is marketing a yet-to-be-built development called The Belize Reserve, an hour from Belize City.

'English is the first language, the legal system is based on the UK's and it's cheaper than the vast majority of the Caribbean, but only an hour and 40 minutes flight from Miami.'

The Belize Reserve eco-community borders a 7,000-acre nature reserve - 40 per cent of the country's land is under government guardianship.

It is offering half-acre plots for £25,000 - a one-to-three bedroom house costs between £40,000 and £60,000.

Robin Chambers, 66, a retired headteacher, and his wife Amy, 52, a retired stenographer, sold their Chester house to move to Belize Reserve in February.

After construction delays they have ended up in a four-bedroom house in the Orchid Garden Eco Village, 14 miles west of Belize City.

'We wanted to have an adventure,' says Robin. 'We started with a 28-day trial through and ten months on we love it.'

'You can buy an acre of land for as little as £5,000 in a good location. It's a lovely climate. But it is still a Third World country,' which is reflected in the state of the roads, for example.

Nearby Panama is a great deal more developed. Popular with U.S. retirees, but now broadening its appeal, Panama has one major financial benefit: all investment income from outside the country is tax-free.

'The country has been a beacon in the property market,' says Ben Jefferis, of Property Frontiers, although there is talk of over-supply in residential apartments.

Property has been going up by more than 10 or 20 per cent, depending on which agent you talk to, and rental yields are still quoted at seven to eight per cent.

In Panama, anyone over 18 can qualify as retired on producing proof of a regular pension.

After a year on a resident visa, you can apply for permanent residency, provided you have at least £135,000 worth of assets within the country.

In five years you can apply for Panamanian citizenship, securing perks such as a 20 per cent discount on doctors' fees and 15 per cent discounts on hospital costs.

The hotspots are in the business districts of Panama City and the beach resorts 110 miles south.

You can claim some exemption from tax on rental income should you let a property, but if you invest in one of Panama's 'tourism zones', you may be exempt from income tax altogether on any income it provides for 15 years.

There are also tax savings to be had when buying if you set up a company in Panama using a local lawyer.

A beachfront plot in Placencia will cost you £135,000, and to build a three-to-four-bedroom house costs from £203,000, according to Someplaceelse.

A prefab two or three-bedroom house can be had from £68,000. Malaysia has encouraged foreign ownership by scrapping capital gains tax on property and loosening its restrictions on foreign ownership (anyone can own leasehold property).

It also launched through which, provided you have the money (from around £29,000 or an offshore income of £1,800), you can be entitled to a 'rolling' residency, initially of ten years.

Although you are subject to tax in the usual way, pensions paid into Malaysia are exempt.

You are also excused import duty, excise and sales tax on buying a car. There has been a lot of investment in public health facilities, to which foreigners are entitled, but private health insurance is recommended.

The Axis Crown Premier is a two-tower residential complex ten minutes from the centre of Kuala Lumpur, which Property Frontiers is marketing (with two-bedroom apartments from £50,500; four-bedroom penthouses from £178,000). Cyprus is a favourite for UK buyers, with its historic connections with the British Army and UK conveyancing.

'You are paying only 5 per cent tax on anything over £3,000,' says Martin Pearce, from Aristo Developers. 'In addition, the first £16,000 is tax free - and then its a top rate of 30 per cent. There are no inheritance taxes or wealth taxes.'

Prices vary hugely in this more mass-market destination. Two bedroom apartments on the grid development at Zephyros Village No4 near Paphos Airport, 500 yards from the beach, start at £124,000 plus VAT at 15 per cent.

A more characterful three bedroom detached villa at the Souni Pine Forest development, ten minutes' drive from Limassol, would be around £253,000 plus VAT.

'Cyprus has a better chance of sustaining prices than other places,' says Mr Pearce. 'That's due to money being spent on infrastructure, such as good motorways and international demand.'

  • SOMEPLACEELSE (020 7731 2200; Property Frontiers (01865 202700; property Aristo Developers (00 357 26842842,


By Mark Hughes-morgan

Last updated at 11:39 PM on 19th February 2009


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