There was a mixed reaction from Caymanian business community, following higher fee levels announced by the government late on 14 Nov.
Property was heavily targeted by the increased fees. Property developers with 16 or more employees will see the cost of their traders licence increase to $20,000 from $750, making it the largest fee increase in percentage terms. Smaller property developers with fewer than 16 employees will see fees jump to $10,000 from $750.
The Local Companies Control Licensing Fees for Realtors and Developers will increase to $15,000 from $12,500. The licence fee for real estate agencies with non-Caymanian agents will increase to $10,000 from $750.
“The increase in licensing fees for real estate firms is unlikely to have a material impact on the industry,” said Andrew Gilbert, chair of the Cayman Islands chapter of the Royal Institution of Chartered Surveyors. “I’m not sure how long the $750 annual fee has been in place, but a more relevant view is that this likely been overlooked, and possibly underlevied for years.”
Another hit to Cayman’s property industry came in the form of a rise in stamp duty, which increased to 10% from 7.5% on homes worth $2 million or more.
“We anticipated an increase in stamp duty, though we had hoped it would be more modest and targeted to specific districts,” said Gilbert.
“We haven’t yet had the opportunity to stress-test the change against last year’s data, but I would expect two immediate effects: a short-term surge in closings ahead of the effective date, followed by a cooling-off period,” he added. “An extra 2.5% may not sound dramatic, but on a $3 million purchase it equates to an additional $75,000 in closing costs.”
Lawyers to pay more
The legal industry also took a hit from a variety of higher charges. There were increases to Practising Certificate Fees, Admission Fees (for non-Caymanian attorneys) and Law Firm Operational Licence Fees.
The biggest increase came in the Law Firm Operational Licence Fees. Legal firms with 10 or fewer employees don’t pay any fee. Those with 11 to 15 attorneys will see their fees increase to $50,000 from $40,000. The fee then increases in graded steps, depending on the number of attorneys, all the way up to firms with more than 111 attorneys, which will see the annual fee rise to $1.2 million from $400,000.
“When you look around at lawyers earning between US$1,000 and US$1,500 an hour, it’s clear that there’s no economic hardship in that sector and long overdue for a rebalancing of costs,” said Simon Cawdery, director at HLX Management. “It won’t disincentivise any lawyers to work here since the rates they are earning are highly attractive.”
Even lawyers were relatively sanguine about the fee rise. “I don’t think the fee increases are that surprising,” said Christian Victory, partner at local law firm HSM. “But it’s not that clear when all these changes come into effect. Some state 2027, while we assume others will be active from 1 Jan. 2026, but it would be good to have that clarified. With the Law Firm Operational Licence Fees, there may have been a missed opportunity to exempt Caymanian lawyers for counting purposes to further encourage employers to hire locally.”
More than just money
According to the figures released by the government, the new measures will raise $79.91 million in additional revenue in 2026 and $97.26 million in 2027. Yet it is unclear how the government calculated those estimates, and the Ministry of Finance and Economic Development did not immediately answer a Cayman Compass question about the methodology.
Nicholas Joseph, founder of relocation consultancy Reside Cayman, believes this is about more than just raising revenue.
“Locals are having to compete with highly skilled and experienced foreigners for entry-level positions – often for artificially depressed compensation,” said Joseph. “At the same time, highly-skilled and educated professionals have been recruited into managerial and more senior positions.”
The result is that the Caymanian middle class is being squeezed, said Joseph. “Everything from social and economic division to crime and traffic have increased. Home ownership is now out of reach for most – with wage inflation falling well behind property inflation. The result is a quiet crisis – which the government is quite rightly seeking, however inelegantly, to ameliorate.”