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14th April 2007

A haven of delights plus duty free

They tick all the boxes. Unspoilt, blue seas and year-round sun.

Island living, especially in unspoilt, sparsely populated sunny climes, is the ultimate dream of many foreign property buyers. The Caribbean paradise of Isla Margarita has all this and more.

Sparkling turquoise seas and sandy white beaches fringe an island on which more than three quarters of the land is undeveloped. Owned by Venezuela, it is about 30 miles off the north-eastern coast and provides a great taste of Caribbean life – with added bonus of being out of the hurricane belt.

There are only 400,000 inhabitants, but it’s a popular and established spot for holidays (particularly with Venezuelans and passing cruise ships) and saw two million visitors in 2006 and expects 2.5 million in 2007. “The Caribbean and South America, especially areas popular with tourists, are good investments,” says Liam Bailey, from Knight Frank. Until recently, Isla Margarita has been relatively untouched by European property investors, but with properties costing a mere snip compared with those in other Caribbean islands, it’s hard to understand why. “Prices in Isla Margarita are cheap,” says Maria McLaren from McLaren Investments.

“A two-bed furnished 90sq metre villa with a pool and barbeque starts at £44,000. In Barbados, an off-plan studio would cost £200,000. Even in the Dominican Republic, you’re talking £150,000.”

The climate here is perfect for those seeking warmth, with year-round sunny weather ranging from 25-32C. Getting there isn’t tricky, with direct flights operating from Gatwick and Manchester, and an additional 18 indirect flights from other UK airports, mostly going via Caracas in Venezuela. Once you’ve bought a property, living here certainly won’t break the bank.

“Venezuela is the only country where petrol is cheaper than water,” says Adam Cornwell, director of GEM Estates. “Filling up a four-wheel drive with 80 litres of petrol costs only £1.55 and a meal for two costs £6.”

The eastern part of the island is more developed, so its not surprising that most of the resident live here, in the capital, La Asuncion, Porlamar and nearby Pampatar. The opportunities for renting property are good, particularly in the 20-week peak season covering Christmas, Easter, Carnival time and summer, as well as from October to March, when Europeans and Canadians look to escape cold winters. The rental potential is six to eight per cent per annum and current figures show capital growth of 32 per cent. According to Adam Cornwell, buying is straight forward and cheap, as anyone can own property and there’s no need for residency to live on the island.

“Isla Margarita has been a tax, VAT and duty free zone since the Sixties. The purchaser of a property doesn’t pay any tax on the purchase, only a normal 0.5 per cent sales tax, one percent for land registry and $100 for the notary,” he says. “Plus there’s an annual property tax of about $100. Isla Margarita is certainly one to watch,” he adds, “especially with the news that a $350 million Formula One circuit with race academy will be built shortly.

That could boost the market further.”

With a great standard of living and fantastic beaches, this island paradise has a lot to offer.