Valuations are an integral part of the home-purchasing process, and anyone interested in investing in property in the British Virgin Islands should familiarise themselves with the different forms they take.

At multiple points throughout the course of buying a home in the BVI, potential purchasers may need to present market value reports on the property they’ve selected, according to Anthony Campbell, a commercial valuator at Smiths Gore’s BVI office.

Initially, potential buyers may want to commission a valuation on a home they’re contemplating purchasing – though that’s uncommon, he explained. Most buyers tend to make an offer beforehand.

When a buyer subsequently goes to a bank to seek a mortgage, however, banks will pay for a valuation on the home, and they represent the majority of Smith Gore’s valuation clients, according to Campbell.

Assuming the buyer is a foreigner, they also need to present a valuation report when applying for a non-belonger landholding licence, the Smiths Gore professional explained. That same report will need to be presented when paying stamp duty, which for non-belongers is 12 percent of the purchase cost or market value of the home, whichever is higher.

The same report could potentially be used for all three or four purposes, though if several months go by between applying for a landholding license and paying stamp duty, changing market conditions could possibly invalidate an earlier valuation, explained Edward Childs, a director at Smiths Gore.

“The prime thing for us is what we find with a lot of clients – banks, government, private individuals – is especially when it comes to a slightly more complex valuation, when they say, ‘Oh can we have a valuation of such and such?’ our role as valuers is to then interpret what it is they mean, because saying you want a valuation of something and valuing it can often be two completely different things,” Childs said.

In addition to determining what a property comprises, valuators must determine what the purpose of the valuation is and how it should be valued, and they’re required to issue terms of engagement to a client that goes over those various points, according to the Smiths Gore director.

Valuation in the BVI

When Childs first came to the BVI in 1990, the territory had few standards in place for valuing real estate.

“There was very little in the way of regulation,” he explained. “Anyone could really turn around and do a valuation and submit it to a bank.”

That’s not the case anymore, however.

“That’s one of the big changes over the last five years,” Mr. Childs said. “The banks and other people are looking for really two things: Number one is are you qualified, number two is do you have professional indemnity insurance.”

Qualified firms in the BVI are governed by the United Kingdom’s Royal Institution of Chartered Surveyors and must follow guidance the RICS issues about how valuations should be undertaken – as well as a host of other international standards depending on the client, the director explained.


There are three traditional valuation methodologies, according to Campbell: the cost approach, the income approach, and the sales comparison approach.

“Traditionally, the cost approach was used in the Caribbean on its own to estimate the market value of a property,” he said. “The cost of a producing a property – which is essentially what the cost approach realizes – doesn’t necessarily amount to the market value of the property, what it will actually sell for.”

Depending on the property, the market value could be significantly less or more than the cost, he noted.

Because of that, valuators typically now use a different approach to determine market value.

“Really for residential properties, the primary approach for arriving at market value is sales comparison, and the reason for that is very simple: that’s how the market works,” Campbell said. “People compare one property with another.”

Valuators rarely use the income approach – which takes the income you can make off a property and applies a multiplier – for residential properties in the BVI, he explained, because few rental properties in the territory make serious returns on investments – most only cover costs.

There are some exceptions to that trend, however: a handful of well-booked beachfront properties on Virgin Gorda and Tortola have been known to make good rates of return, he added.


Instead of commissioning valuations, sellers will typically ask for a broker’s opinion on what they should list their property for, according to Campbell.

Sellers also have access to other property listings around the territory, which has a tendency to lead them astray, the valuer explained.

“I think it’s one of the challenges in this market that very often sellers tend to be guided more by asking prices than by actual sales and data,” he said. “And that can give rise to incorrectly priced properties, and so my advice for sellers is to make sure that they are fully aware of all the sales transactions that have actually closed. That’s necessary.”