November 4th 2024 | reading time: 6 minutes
Malou van Drongelen
Real Estate Agent
Sunbelt Realty Bonaire
The real estate market on Bonaire has grown in popularity in recent years, especially among international investors and people looking for a second home or vacation home in the Caribbean. Bonaire offers a stable, growing real estate market with tax advantages, limited competition and a strong tourist sector. The combination of Dutch legal protection, tax advantages, and a constant flow of tourists make it an attractive place for real estate investments, both for short and long-term investors.
This blog explains some of the most important advantages and considerations. If you would like to receive more information from us after reading the blog, please contact us at info@sunbeltbonaire.com.
1. Stable economy and political status
Bonaire is part of the Caribbean islands, but has been a special municipality of the Netherlands since 2010. This means that Bonaire benefits from a stable legal, economic and political system. The protection offered by Dutch law ensures security for investors and property rights, which increases its attractiveness for real estate investments.
2. Good geographical location
Bonaire is located below the hurricane zone, which means that the island is rarely directly affected by hurricanes. This makes Bonaire, together with the other islands of the Dutch ABC islands (Aruba, Bonaire and Curacao), a relatively safe destination during the hurricane season, which runs from June to November. This is a great advantage for tourists visiting the island during the hurricane season, as the risk of interruptions to vacation plans due to extreme weather is considerably lower than on many other Caribbean islands..
3. Low crime rate
Bonaire is generally a safe destination for travelers. The island has a low crime rate and is known as a quiet place, especially because of its small-scale, relaxed atmosphere.
4. Growing tourism
Bonaire is known for its beautiful nature, quiet surroundings and especially its diving tourism. The island attracts an increasing number of tourists each year, especially from Europe and the United States. Bonaire surpassed the figures of 2019, 2021, and 2022 by welcoming 169,706 overnight visitors between January and December 2023. This historic milestone represents an 8% growth compared to pre-pandemic figures in 2019. In total, Bonaire welcomed 169,706 overnight visitors in 2023. This is the island’s third consecutive year of year-over-year growth, surpassing all previous years. Dutch visitors accounted for 47% of the total, followed by visitors from the United States (23%), Curaçao (14%), Germany (2.1%), Aruba (2%), Canada (2%), Belgium (1%), and Switzerland (1%).
The most common purpose for Bonaire’s guests to visit was vacation, with 52% citing this as the primary reason. Diving followed closely behind at 13.6%, due to its pristine coral reefs, dive sites and relaxed atmosphere. This makes waterfront real estate, holiday homes and hotels particularly attractive, as tourists often seek comfortable places to stay.
5. Tax benefits
Bonaire offers attractive tax benefits for investors. For example, there are lower property taxes compared to other Caribbean islands, there is an exemption from property tax on new construction and European Dutch residents are exempt from income tax in the Netherlands on rental income and capital gains from Bonaire. This means that operational costs can be lower, which increases the return on real estate investments. Bonaire offers tax planning opportunities for foreign investors.
6. Diversification of investments
Dutch investors investing in Bonaire must take into account different currencies and associated exchange rates. Bonaire uses the US dollar (USD) as its official currency. By spreading investments across multiple regions and markets, you can reduce the impact of exchange rate fluctuations on your total portfolio. This means that you are not completely dependent on one currency. It is also possible for non-residents to opt for local financing in USD when investing in Bonaire.
7. Positive, growing value development
The Bonaire real estate market is in a growth phase. The supply of real estate on Bonaire is limited due to the geographical size of the island. Although tourism is already well developed, there are still many opportunities for further development of hotels, resorts and luxury homes. The current limited supply of real estate combined with a growing demand for houses and holiday homes drives up prices. This makes it an attractive long-term investment perspective. Real estate in popular tourist areas or on the water is considered a stable investment. The value development of real estate on Bonaire has a long-term average growth of approximately 7%.
8. Good rental opportunities
For investors who want to rent out their properties, Bonaire offers a lucrative rental market. Due to the constant influx of tourists, holiday homes and apartments can be rented out throughout the year, which ensures a steady stream of income. Especially in the high season, rental prices are often considerable, allowing investors to achieve good returns.
Long-term rentals on Bonaire, a continuous rental period of more than 3 months, are also a popular option for tenants who want to stay on the island for a longer period, such as expats, seasonal workers or people who are considering permanent residence. The housing market on Bonaire offers various options for long-term rentals, from apartments and houses to villas in various price ranges and styles.
9. Transparent purchase process
Because Bonaire is a special municipality of the Netherlands, investors have access to the real estate market without the complexity of investing in other, less stable Caribbean countries. The purchase process on Bonaire has many similarities with the European Netherlands. For example, the Land Registry office Kadaster is also located on Bonaire. This facilitates the ownership and transfer processes for EU citizens and companies, via the notary system on Bonaire and ensures legal and economic consistency.
10. No ownership restrictions for foreigners
There are no restrictions for foreigners to purchase real estate on Bonaire, making it accessible to investors worldwide. This gives Bonaire an advantage over other islands where stricter rules apply to foreign ownership rights.
