Property in Vanuatu: how a foreigner buys a house when the land belongs to communities

Property in Vanuatu in brief

In brief: the housing market for foreigners is concentrated in Port Vila on the island of Efate and in Luganville on Espiritu Santo. Land is not sold to foreigners as freehold: plots are taken on leases of up to 75 years. Rental tax is 12.5% and VAT 15%, and there is no personal income tax, capital gains tax or inheritance tax.

Property and citizenship in Vanuatu are linked, but they are separate decisions. You do not need to buy property for a passport: the DSP programme with a contribution from $130,000 and the CIIP fund with a single sum of $157,000 for a family of up to four grant citizenship in 2-3 months. The REO option has been running since 23 July 2021 and is tied to approved property projects.

• Land. Held by custom owners; foreigners lease for up to 75 years.
• Where people buy. Port Vila and Luganville, with individual properties on other islands.
• Taxes. Rental tax of 12.5% when letting, VAT of 15%.
• Citizenship. Without buying, under the DSP or through the CIIP fund; with property, under the REO option.

Where the country is and how its islands are organised is shown in the article Vanuatu on the map, and citizenship conditions in Vanuatu citizenship by investment.

The property market: Port Vila and Luganville

In brief: Vanuatu has 83 islands, but foreigners buy homes mainly in the capital Port Vila on Efate and in Luganville on Espiritu Santo. Supply is small, so a good property takes longer to find than on large markets and is checked more carefully.

Port Vila remains the centre of the country: it is home to the government, the banks National Bank of Vanuatu, ANZ, BRED and Bank South Pacific, and most services for foreigners. Luganville on the largest island, Espiritu Santo, offers a quieter life and a small foreign community. Outside the two towns, transactions are rare: coastal plots, small resort properties, houses on the outer islands.

A small market changes the approach to buying. There are no public price lists or price-per-square-metre statistics to rely on, so the value is calculated for the specific property: the remaining land lease term, the condition of the house, back-up systems, the distance to town. There is almost always time for checks, and haste here more often works against the buyer.

Land held by custom owners: leases of up to 75 years

In brief: under the Constitution of Vanuatu, land belongs to its custom owners. A foreigner does not buy land as freehold but takes a plot on a long-term lease of up to 75 years; the house, villa or apartment is held on the basis of that lease.

A long-term lease (leasehold) gives the right to use the plot and build on it within the term. For apartments and units in complexes, a right to a unit in the property (strata) is used. In both cases the buyer checks not only the house but also the land document: who the lessor is, how many years remain, how the lease is renewed and whether there are encumbrances.

The main parameter of the transaction here is the remaining lease term. A house on a plot whose lease ends in a few years is worth less and harder to sell, so the term, renewal conditions and the lessor’s consent are checked before negotiating the price.

Renting before buying

In brief: for those planning to live on the islands, it is easier to rent for a season first and buy as a second step. Renting shows the climate, the pace of life and the areas without irreversible decisions.

A rented house lets you live through the rainy season, test the road to town, connectivity and electricity supply, and understand which back-up systems your own house needs. Furnished houses with a generator and water storage in Port Vila are in demand, so they are sought in advance through local agents and the foreign community.

For long-term living in the country foreigners obtain a residence permit, which Vanuatu citizens do not need. How these statuses differ is covered in the article Vanuatu residence, how to get to the islands in entry to Vanuatu and flights, and everyday life and living costs in living in and relocating to Vanuatu.

The REO option: citizenship and approved property projects

In brief: the REO programme has been running since 23 July 2021. The applicant invests in property in one of four government-approved projects and goes through the same checks as under the DSP. The Citizenship Office’s published tariff table does not give the investment amount; it is confirmed by the agent for the application.

The Citizenship Office lists four approved projects: Pacific Springs in Rentabao on Efate, Narpow Point Coral Bay and FPF Rainbow City Project on Narpow Point on Efate, and Milai on the island of Espiritu Santo. A property outside this list is not part of the citizenship programme, even if the seller describes it that way.

If the family’s goal is a passport rather than the property itself, programmes with published amounts are more often chosen: the DSP from $130,000 for a single applicant or the CIIP fund at $157,000 for a family of up to four, with $50,000 returned after 5 years. On top of the contribution, only the FIU fee is paid to the state: $5,000 under the DSP and $8,000 under the fund. The options are compared in the article Vanuatu citizenship through real estate.

What the buyer’s costs are made of

In brief: the property price is set by negotiation, the remaining land lease term and the condition of the house. Added to it are the costs of checking title, registration, insurance, management in the owner’s absence and, when letting, rental tax.

• Property price. Under the contract with the seller, taking into account the land lease term.
• Checks and registration. Legal title check and lease registration, per invoice.
• Construction and repairs. Materials and services within the country with 15% VAT.
• Insurance. A policy that covers storm damage.
• Management. A property manager if the owner lives abroad.
• Tax when letting. 12.5% of gross rent.

Payments in Vanuatu go through local banks, and domestic settlements are in vatu. At the Reserve Bank of Vanuatu rate on 15 September 2026, one US dollar was 116.54 vatu, so a dollar budget is recalculated on the payment date. The transfer route through correspondent banks is agreed before signing the contract.

How the transaction works

In brief: the transaction is carried out in five steps: goal and budget, checking the property and the land lease, contract and payment, registration, ownership. The buyer’s rights arise after registration, not after a prepayment.

1. Goal and budget. What the property is for: living, wintering, letting or combining with citizenship. The goal determines the area, type of property and form of title.
2. Checks. The lessor, remaining lease term, renewal conditions, encumbrances, and for REO the project’s status on the approved list. Separately, the condition of the house, generator, water and cyclone resistance.
3. Contract and payment. The terms of the transaction, the payment schedule and the bank through which the money will pass.
4. Registration. The transfer of title is registered, and only then does the property belong to the buyer.
5. Ownership. Insurance, a manager, maintenance of back-up systems.

The property is checked by the buyer’s side, not the seller’s agent. How documents and the origin of funds are checked in the citizenship programme is covered in the article due diligence.

Taxes on owning and letting

In brief: Vanuatu has no personal income tax, capital gains tax or inheritance tax. When letting a property, the owner pays rental tax of 12.5% of gross rent, and commercial and short-term rentals are subject to 15% VAT.

Rental tax is calculated on gross rent. For individuals the first 200,000 vatu are exempt, about $1,700 at the rate on 15 September 2026, and returns are filed by 28 June and 28 December. VAT has applied in Vanuatu since 1998, the rate has been 15% since 2018, and registration is mandatory with turnover of 4 million vatu or more.

The absence of local income tax does not cancel obligations in the country of tax residence. A tax resident of another country, Russia for example, declares income from letting in Vanuatu under that country’s rules. The country’s tax system is covered in the article taxes in Vanuatu, and changing residence in how to become a Vanuatu tax resident.

Three ownership models

In brief: a property is bought to live in, to let, or in combination with citizenship. The model determines the area, the form of title and the costs.

Living and wintering. A house in Port Vila or Luganville for permanent living or a season. The road to town, connectivity, a generator and water storage matter. The economics are simple: the family pays for a way of life, not for returns.

Letting. A property for foreigners who live in the country long term. Income is reduced by rental tax of 12.5%, management, insurance and vacancies, so the calculation is based on the net amount, not gross rent.

Property and citizenship. A property in an approved project under the REO option, or a separate purchase after obtaining citizenship under the DSP or through the CIIP fund. The second option suits those who need a passport quickly and can choose a property without haste.

Buyer’s checklist

In brief: ten points cover the main questions before signing. The points on the lease term, encumbrances and project status are checked before paying any money.

1. The ownership goal is written down: living, letting or combining with citizenship.
2. The form of title is clear: a land lease or a unit in a complex.
3. The remaining lease term and renewal conditions have been checked.
4. Encumbrances and the lessor have been checked against the documents.
5. For REO, the project is on the Citizenship Office’s approved list.
6. The condition of the house, cyclone resistance, generator and water have been checked.
7. The cost of a year has been calculated: insurance, management, maintenance.
8. The bank and payment procedure are agreed before the contract.
9. There is an exit plan: to whom and how the property can be sold.
10. Taxes have been summarised: rental tax, VAT and obligations in the country of residence.

On the islands, insurance is a condition for keeping the property safe: the policy must expressly cover storm damage, and the exclusions and excess are read before signing. Good-quality construction is cheaper both to insure and to maintain.

What to weigh before the deal

In brief: before buying, assess four things: the house’s resilience to weather, the time it takes to sell on a small market, the land documents and remote management of the property. Each of them is dealt with through checks and calculation.

• Weather. Vanuatu lies in a zone of cyclones and seismic activity, so construction quality, insurance and back-up systems are decisive.
• Time to sell. A small market sells more slowly, so the ownership horizon is counted in years, and the buyer on exit will more often be another foreigner.
• Land documents. The lease term, renewal conditions and relations with the lessor are checked legally before the deal.
• Management. An owner abroad needs a manager, and their fees are built into the calculation from day one.

The general principle is the same as in the citizenship programme: the decision is made on verified documents and calculations, not on a photograph of the property.

Five buyer mistakes

In brief: the most common mistakes are buying from a photograph, not checking the land lease term, relying on prices from the internet, forgetting ownership costs and treating any property as a route to a passport.

1. Buying from a photograph. You will live in a house with a rainy season and a road to town, so rent first.
2. Taking the land lease on trust. A house on a plot with a short remaining lease loses value and is harder to sell.
3. Prices from the internet. The market is small, and each property is assessed separately.
4. A calculation without ownership costs. Insurance, management and maintenance of back-up systems noticeably change the total.
5. Any property as a route to a passport. Only projects on the REO list lead to citizenship, while without a purchase a passport is given by the DSP and the CIIP fund.

Luganville and other islands

In brief: Luganville on Espiritu Santo offers a quieter life than the capital, while transactions on the outer islands require full document checks and well-planned logistics.

Espiritu Santo covers 3,956 sq km and remains the country’s largest island, and Luganville on it is Vanuatu’s second town. It has a port and basic infrastructure, and the approved Milai project from the REO list is located on Santo. Life is calmer than in the capital, and this option is chosen by those who do not depend on a daily trip to Port Vila.

On the outer islands, individual plots and small resort properties are sold. Here checking the land lease, delivering materials and the house’s self-sufficiency come to the fore. Purchases are made only with legal support and a plan for remote management. A Vanuatu citizen with a house on the islands can travel easily around the region and Asia, and the full list of destinations is in the article 46 countries visa-free and 42 more with a visa on arrival.

Who property in Vanuatu suits

In brief: buying suits those who plan to live or winter on the islands, let the property to foreigners long term, or combine their own home with citizenship. Those who only need a passport do not have to buy.

A home of their own in Vanuatu is chosen by families who value the ocean, quiet and a calm pace of life, and who are prepared to manage the property themselves or through a manager. For an investor with a short horizon, a small market is less suitable than for someone buying for years.

If the priorities are not yet clear, the review in the article is Vanuatu citizenship worth it helps: the task first, then the tool.

How BRIDGES works with property in Vanuatu

In brief: BRIDGES supports the client’s goal: we check the property, the land lease and the project status, set out the sequence of “rent, check, buy” and link the transaction to the citizenship programme if needed.

If the goal is citizenship through REO, we check the project against the approved list, the land documents and the payment procedure, and handle the transaction together with the application. If the goal is a home to live in, we help rent for a season, check the chosen property and prepare the registration. For a transaction through a company and an account at a local bank there is the service business registration in Vanuatu, and the calculation for the citizenship programme is on the page Vanuatu citizenship.