Even Hugh Hefner would be impressed

The Life: Caymans castle comes with a grotto that would make a playboy proud.

The costliest mansion in Cayman Islands is for sale.David Rogers / Getty Images
Beta V.1.0 - Powered by automated translation

If you are looking for an eight-bedroom estate on 250 feet of Caribbean beachfront, then perhaps the Castillo Caribe fits the bill.

Q&A: Biggest hurdle is residency

Last Updated: May 06, 2011

Will Castillo Caribe fetch US$59.5 million (Dh218.5m)? Unlikely. Although the market has improved significantly this year and brokers are seeing more interest in Cayman Islands property than since 2008, the most expensive luxury properties are slow to move - none worth more than $6m sold last year.

How much does the average property cost? According to the lands and survey department, the average price of a residential home sold in March this year was $645,442.

Then it's a good time to snag a bargain? Probably, but residential prices have not dropped as much as many US markets, for example, because Cayman Islands property did not rocket in value so much during the boom years.

Is the tax-neutral status of the islands still under threat? Although buyers must pay stamp duty on property purchases, the islands do not levy property, income, capital gains or inheritance tax. Because the local economy has improved in 2011, new taxes now look unlikely.

What else should foreign buyers consider? There are no restrictions on foreign property ownership, but securing working or residency permits can be a hassle. Investors receive a residency certificate for 25 years if they spend $900,000 on property.

This 48,000 square foot Cayman Islands mansion was built only in 2008 when the 35-year-old software billionaire Jerry Beck decided to retire to the islands. It is situated on Grand Cayman, just south of George Town, and listed for US$59.5 million (Dh218.5m) with Sotheby's International Realty.

It is the most expensive home for sale in the Cayman Islands. The next dearest residential property available is the Twin Coves Estate, another eight-bedroom, ocean-front property on Grand Cayman, which is up for grabs for a mere $17.8m.

So what do you get for almost $60? The Castillo Caribe has a 5,000-sq-ft great room with two grand staircases and floor-to-ceiling windows looking out to sea. Then there's the banquet hall, wine cellar, spa, gymnasium, rooftop helipad, swimming pool and grotto that would surely meet the approval of the magazine publisher Hugh Hefner, tennis court, indoor golf and a cinema. Fortunately, since it is right on the beach, the house also meets the top hurricane resistance specifications.

Cayman Island residential sales since January 2010:

Last Updated: May 05, 2011

1 Four-bedroom house on Finger Cay Road, sold Dec 2010 $4.5m.

2 Three-bedroom Sovereign condominium, sold Jan 2011 $3.8m.

3 Four-bedroom Commonwealth condo, sold Jan 2011 $3.3m.

4 Three-bedroom Water's Edge condo, sold March 2011 $3.1m.

5 Three-bedroom condo at The Meridian, sold Feb 2010 $2.8m

Source: Cireba

Still, it has been on the market for almost a year, which is no surprise considering last year was a terrible time to try to sell property in the Cayman Islands, much worse than 2009. Residential prices fell between 10 per cent and 25 per cent compared with 2009 and land transfers declined 23 per cent.

That was because many financial institutions based in the Cayman Islands laid off expatriates during the recession, which reduced the resident population, and with it, demand for property. After the islands posted a budget deficit, there were also fears the UK government would impose direct taxation on the UK Overseas Territory. This made would-be investors wary and few properties changed hands, even along the popular Seven Mile Beach on Grand Cayman, which attracts many foreign buyers.

However, if you buy the Castillo Caribe, you do not just get the house and grounds. To sweeten the price tag, the owners are also throwing in all the furnishings, from the grand piano in the great room to the bouncy castle and ball pool in the kids' playroom.

The Quote: "Last year, there was the recession, the budget deficit and murmurings of a property tax, which led property investors to be nervous. But this year is a very different story." Jeremy Hurst, the president of the Cayman Islands Real Estate Brokers Association