Because there is no income tax, property tax, capital gains tax or inheritance tax charged in the Cayman Islands, one of the ways the government generates revenue is through stamp duty on the purchase of real estate. This is a one time tax on land or building transfers assessed at the time of transfer. If a land purchase is being made, stamp duty is payable on the land value, not on the building after it has been built. For building purchases, furnishings are deducted from the sale price before stamp duty is calculated.
Presently, stamp duty rates range from 6-7.5% based on the location of the land or property. Purchases along the Seven Mile Beach corridor incur a 7.5% stamp duty due to the high infrastructure in that area. All other areas fall in the 6% bracket.
Further information can be obtained from your Cayman Islands Real Estate Agent.