The "Borrow Until You Die Strategy" the Jamaican Tax Department Hopes You NEVER Learn

Ever wondered how the wealthiest individuals in Jamaica maintain and grow their fortunes without losing a significant portion to taxes? This video breaks down a sophisticated, legal financial maneuver known as the "Buy, Borrow, Die" strategy—a method used by the ultra-rich to live luxuriously while using debt as a tax-free shield.

While the average worker focuses on standard compliance like PAYE and GCT, the "big players" are performing a financial ballet that allows their wealth to balloon invisibly.

How the "Buy, Borrow, Die" Strategy Works
Step 1: Buy Appreciating Assets The foundation of this strategy is acquiring assets that increase in value over time, such as prime real estate in Cherry Gardens or Jack’s Hill, or high-growth stocks on the Jamaica Stock Exchange (JSE). In Jamaica, there is no capital gains tax on the appreciation of these specific assets.

Step 2: Borrow Instead of Selling The wealthy avoid selling their assets because sales trigger costs like Transfer Tax and Stamp Duty. Instead, they use their multi-million dollar portfolios or property as collateral for bank loans. Because loan proceeds are not considered taxable income, they get the cash they need tax-free while their investments continue to compound.

Step 3: Die and Pass it On When the owner passes away, the assets are transferred to heirs. In Jamaica, the Transfer Tax upon death is currently just 1.5% on values over $10 million, which is often much lower than the cumulative taxes paid over a lifetime of standard income and sales. The estate then uses a portion of the grown assets to pay off the debt, leaving the remainder to the family debt-free and largely tax-free.

The Risks and Requirements
This strategy is a game of "horizontal inequity" and isn't accessible to everyone. To make it work, you need:

Significant Collateral: You must have assets banks are willing to lend against.

Low Interest Rates: You need the leverage to negotiate rates lower than your asset's growth rate.

Cash Flow: You still need a way to service the interest on these loans without selling the assets.

Market Stability: If your assets drop in value, the bank can call in the loan, causing the strategy to crumble.

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