Buyer's Guide
Buying a property in St.Lucia where there is
a tax haven with no VAT, no capital gains tax, no inheritance tax and
no estate tax makes a great deal of sense. St.Lucia is one of the worlds
top destinations for weddings and honeymoons making a holiday rental
property potentially lucrative. St.Lucia has really embraced the
worldwide taste for health spas with the first St.Lucia Health &
Wellness Retreat, supported by the government and private businesses,
being established and opening soon on the island. Being one of the most
accessible islands in the region with the lowest crime rate St.Lucias
affordable properties offer an ideal opportunity for investment.
Comparable in many ways to neighbouring Barbados but with house prices
ranging from 40-60% lower this beautiful island should not be overlooked
as an investment opportunity.
With a total land area of just
620 sq miles St.Lucia, often called "The Helen of the West Indies"
because of its natural beauty, sits in the ocean like a shimmering
jewel. Pristine white sandy beaches, tropical forest populated by
rainbow-plumed birds and acres of orchards filled with sweet smelling
tropical fruits such as mango, papaya and banana are crowned by the
islands twin peaks the Gros & Petit Pitons.
How to buy St Lucia property
There
are certain rules and regulations you must comply with as a non
domicile of St Lucia in order to purchase a St Lucia property. For
instance, you will need to apply for an Alien Landholding Licence.
Generally the cost of purchasing a property on St Lucia will come out at
between 6-8% on top of the purchase price. This will cover stamp duty,
the Alien Landholding Licence, Treasury receipt, legal costs and
registration fees. If you are taking out a mortgage, lenders tend to
charge a set-up fee.
Alien Landholding Licence
Foreigners must
apply to the Ministry of Planning for an Alien Landholding Licence
which costs EC$1,500, is non-refundable and does not need renewing. The
process takes up to 16 weeks as the application is vetted by the
Physical Planning Office of the Ministry of Physical Development,
Environment & Housing, approved by the Prime Ministers Office and
finally by the Office of the Attorney General.
Your locally
appointed lawyer will make the application for the Alien Landholding
Licence on your behalf. Along with your completed application you will
need to provide the lawyer with the following information:
Certificate of character for each applicant (from your local police station)
A bank reference
Your CV
A copy of your passport data page
Full set of fingerprints (from your local police station)
Statutory declaration
4 passport size pictures of each applicant
Full
details of the proposed property or land purchase (including a survey
plan and land register of the property (from the Vendor) and a value
assessment of the land or property (although the value assessment may
not be necessary
Receipt proving payment of application fee
Initial approval from the Development Control Authority (this may not be necessary).
In
addition to the application fee for the Alien Landholding Licence, the
following fees are applicable depending on the land area of your
property.
Land Area (in acres) Price (in EC$)
Under 1 $5000
1-10 $10,000
10-20 $20,000
20-50 $30,000
50-100 $40,000
100+ $50,000
Deposits
There
is no standard procedure on this, but common practice is to offer 10%
of the purchase price as a deposit, which is forfeited if the buyer
pulls out. If the vendor pulls out then the buyers 10% is returned as
well as 10% from the vendor plus an additional penalty of 10%. In the
unlikely event that the Alien's Landholding Licence is not granted, then
the deposit is refunded.
Annual Property Tax
5% of the unfurnished rental value of your property, regardless or intent of use.
Stamp Duty
2% of purchase price
Vendors Tax
10% for non citizens or 5% if the property is owned by a local citizen of St Lucia.
There
is no vendors tax if the property is owned by a company as you would
transfer the shares in the company as a way of transferring the property
(rather than by deed of sale). It is therefore best that all foreign
clients sent up a local company and to apply for the license in the
company's name. When you come to sell, you will be selling the company
rather than the property itself.
There is no capital gains tax, inheritance tax or gift tax in St Lucia.
Local solicitors / lawyers usually charge 3% to 5% of the purchase price.
There
are certain very attractive tax incentives available to a selection of
'returning residents' of St Lucia including the right to ship a
container of 'personal goods' without paying duty on them and importing
or purchasing a vehicle duty free.
To qualify for 'returning
resident' status you must be a citizen of St Lucia, either by birth or
parentage who is returning to St Lucia after a minimum of 10 years off
the island or be married to the aforementioned citizen.
There are
strict guidelines as to what constitutes 'personal goods' and various
limitations that should be read thoroughly. For up-to-date information
please contact your local Consulate General of St Lucia, or contact one
of our agents.
Example of a full listing here - http://www.guidetostlucia.com/returning-residents.html
Local
mortgages are available (subject to status) up to 75% of the property
value with maximum term of 25 years but both the LTV (loan to value) and
the term vary of course according to a number of factors. Interest
rates are generally set at LIBOR + a spread of between 3-5%. The minimum
you can borrow is usually US$250,000 and the maximum is US$2.5 million.
You will always need to prove that you have the funds available to
finance a mortgage independently from rental income (if you are planning
to rent your St Lucia property). We are happy to provide reliable
contacts for financial advice and mortgage providers.
Our
agent on St Lucia can help you with the managing and possible renting
of your property. Management fees are set at around EC$1000 per month or
10% of the rental income, whichever is greater, whereas fees for
assistance in long-term rentals come in at 1 month's rent and 15% of
income for short-term rent.
Banking is easy on St Lucia,
and we are happy to advise the best local banks for your account. It is
better to transfer your funds in US$ Dollars, and there is a fixed rate
of exchange to EC$ Dollars (Eastern Caribbean Dollar). You can use most
credit or debit cards to get cash from the ATM's. For large sums of
money (over £5,000), and with exchange rates and consumer confidence in
constant flux it is a good idea to use currency exchange specialists to
arrange the transfer of funds to your local bank account or lawyer. In
any event, you will always get a better rate of exchange from a
specialist company and there will be no banking charges for the money
transfers.
When you purchase your property in St Lucia you will
need to transfer money abroad. The common currency quoted for Caribbean
property is the US Dollar. If you are buying foreign currency, it is
certainly worth considering different options for the exchange because
your bank will rarely offer the best rates and service when it comes to
large currency transactions.
For the past ten years we have
recommended a couple of highly reputable currency specialists who are
able to offer commercial rates to private purchasers, subject to a
minimum of £2000.
http://www.rodney-bay.com/laws_regulations.php
Laws and Regulations When Buying Property in St Lucia
Alien's Landholding License - General Information
The
property purchasing procedure in St Lucia is similar to that in the UK,
with the exception of the Alien’s Landholding License. Foreigners
wishing to purchase land in St Lucia must first acquire an Alien's
Landholding License. Laws were recently changed in St Lucia to make this
process quicker and more flexible. Please note the following:
A local lawyer must register the licence.
It is a permanent licence, which does not require renewal.
The licence is granted for a specific property or plot of land and is not transferable.
There is a non-refundable licence application fee of EC$1,500.00.
The license fee is EC$5,000.00 for properties measuring less than 1 acre and EC$10,020.00 if over 1 acre.
There
is a future tax liability of 10% of the cost of the property or plot of
land, when eventually sold. Note that the payment of the 10% tax can be
avoided by making the purchase through a company, which can be formed
at the time of purchase. Company formation takes approximately 6 weeks
and cost EC$3,200.00.
License applications take 6 to 8 weeks to process and is normally done during the early part of property purchasing process.
Note
that when obtaining an alien's landholding license to buy land only,
you are required to build within 2 -3 three years of purchase.
Procedures for Acquiring an Alien's Landholding Licence
The
application is vetted by the Physical Planning Office of the Ministry
of Physical Development, Environment & Housing, before being sent to
the Prime Minister's Office for approval. After the application has
been granted the draft license is sent to the Office of the Attorney
General for approval.
The list below indicates what will need to be submitted with the licence application form:
Completed application form.
Full details of the property or land to be purchased.
A value assessment of the property or land.
Statutory declaration.
Four passport size photographs.
Certification of character - report from your local police station on information or lack of information on file.
Certified finger prints - from a police station.
Treasury receipt for payment of the application fee (EC$1,500.00).
Approval in principle, from the Development Control Authority (DCA) in relation to the use of the property or land.
Stamp Duty
Stamp duty on property is 2% of the purchase price.
Purchase Deposit
The
normal deposit for purchase is 10% of the purchase price. To prevent
gazumping, a forfeiture clause is introduced into all purchasing
contracts as follows:
f the buyer pulls out the deposit is forfeited.
If
the vendor pulls out then a sum equal to the deposit must be paid to
the buyer. The buyer would receive their original deposit plus the 10%
forfeited by the vendor.
If the buyer is unable to proceed due to
non-granting of the Alien's Landholding License, then the 10% deposit is
refunded. Note that this is a rare occurrence.
Solicitor Fees
Local solicitor fees range from 3% to 5% of the purchase price.
Start-up Cost
The
start-up cost for property purchase is approximately 15% of the
property price, made up of, 10% deposit + 2% stamp duty + 3% solicitor
fees.
Purchasing Off-Plan
When purchasing properties forming
part of a new development, the developing company would put in place an
escrow account for owners to make their deposits into, so that the money
is totally safe. The development stage payments is typically as
follows:
10% deposit
20% On completion of foundations
30% On completion of structure
20% On completion of roof and exterior
20% On completion of building
Vendor's Tax
When
selling property in St Lucia, vendor's tax needs to be paid at a flat
rate of 10% for non-citizens. If the property is owned by a local
company and the property sale is effected through a share transfer then
2% is payable instead of the 10% vendor's tax.
St Lucian citizens pay vendors tax by the following breakdown:
Nothing on the first EC$50,000.00
2.5% on the next EC$25,000.00
3.5% on the next EC$75,000.00
5% on the balance
Citizenship
You
can avoid the Alien's Landholding License by becoming a citizen of St
Lucia. If you are not resident in St Lucia you can qualify for
citizenship if you fit into one of the following categories:
You or your parents were born in St Lucia.
You are married to a St Lucian citizen.
If
you don't fit into one of the above categories, owing property on the
Island is one of the main qualifications when applying for citizenship.
For further details on any of the above, please contact your appointted St Lucian lawyer.
Exemption From Property Tax
The
Land and House Tax Act was amendment in parliament on the 12th Oct 2006
to be effective 1st April 2006. Exemption from property tax is granted
where an owner occupied residential property, the owner of which has
attained the age of sixty years or more and who uses the residential
property exclusively for providing accommodation for himself or herself
and members of his or her family.
Buying a property in St.Lucia where there is
a tax haven with no VAT, no capital gains tax, no inheritance tax and
no estate tax makes a great deal of sense. St.Lucia is one of the worlds
top destinations for weddings and honeymoons making a holiday rental
property potentially lucrative. St.Lucia has really embraced the
worldwide taste for health spas with the first St.Lucia Health &
Wellness Retreat, supported by the government and private businesses,
being established and opening soon on the island. Being one of the most
accessible islands in the region with the lowest crime rate St.Lucias
affordable properties offer an ideal opportunity for investment.
Comparable in many ways to neighbouring Barbados but with house prices
ranging from 40-60% lower this beautiful island should not be overlooked
as an investment opportunity.
With a total land area of just
620 sq miles St.Lucia, often called "The Helen of the West Indies"
because of its natural beauty, sits in the ocean like a shimmering
jewel. Pristine white sandy beaches, tropical forest populated by
rainbow-plumed birds and acres of orchards filled with sweet smelling
tropical fruits such as mango, papaya and banana are crowned by the
islands twin peaks the Gros & Petit Pitons.
How to buy St Lucia property
There
are certain rules and regulations you must comply with as a non
domicile of St Lucia in order to purchase a St Lucia property. For
instance, you will need to apply for an Alien Landholding Licence.
Generally the cost of purchasing a property on St Lucia will come out at
between 6-8% on top of the purchase price. This will cover stamp duty,
the Alien Landholding Licence, Treasury receipt, legal costs and
registration fees. If you are taking out a mortgage, lenders tend to
charge a set-up fee.
Alien Landholding Licence
Foreigners must
apply to the Ministry of Planning for an Alien Landholding Licence
which costs EC$1,500, is non-refundable and does not need renewing. The
process takes up to 16 weeks as the application is vetted by the
Physical Planning Office of the Ministry of Physical Development,
Environment & Housing, approved by the Prime Ministers Office and
finally by the Office of the Attorney General.
Your locally
appointed lawyer will make the application for the Alien Landholding
Licence on your behalf. Along with your completed application you will
need to provide the lawyer with the following information:
Certificate of character for each applicant (from your local police station)
A bank reference
Your CV
A copy of your passport data page
Full set of fingerprints (from your local police station)
Statutory declaration
4 passport size pictures of each applicant
Full
details of the proposed property or land purchase (including a survey
plan and land register of the property (from the Vendor) and a value
assessment of the land or property (although the value assessment may
not be necessary
Receipt proving payment of application fee
Initial approval from the Development Control Authority (this may not be necessary).
In
addition to the application fee for the Alien Landholding Licence, the
following fees are applicable depending on the land area of your
property.
Land Area (in acres) Price (in EC$)
Under 1 $5000
1-10 $10,000
10-20 $20,000
20-50 $30,000
50-100 $40,000
100+ $50,000
Deposits
There
is no standard procedure on this, but common practice is to offer 10%
of the purchase price as a deposit, which is forfeited if the buyer
pulls out. If the vendor pulls out then the buyers 10% is returned as
well as 10% from the vendor plus an additional penalty of 10%. In the
unlikely event that the Alien's Landholding Licence is not granted, then
the deposit is refunded.
Annual Property Tax
5% of the unfurnished rental value of your property, regardless or intent of use.
Stamp Duty
2% of purchase price
Vendors Tax
10% for non citizens or 5% if the property is owned by a local citizen of St Lucia.
There
is no vendors tax if the property is owned by a company as you would
transfer the shares in the company as a way of transferring the property
(rather than by deed of sale). It is therefore best that all foreign
clients sent up a local company and to apply for the license in the
company's name. When you come to sell, you will be selling the company
rather than the property itself.
There is no capital gains tax, inheritance tax or gift tax in St Lucia.
Local solicitors / lawyers usually charge 3% to 5% of the purchase price.
There
are certain very attractive tax incentives available to a selection of
'returning residents' of St Lucia including the right to ship a
container of 'personal goods' without paying duty on them and importing
or purchasing a vehicle duty free.
To qualify for 'returning
resident' status you must be a citizen of St Lucia, either by birth or
parentage who is returning to St Lucia after a minimum of 10 years off
the island or be married to the aforementioned citizen.
There are
strict guidelines as to what constitutes 'personal goods' and various
limitations that should be read thoroughly. For up-to-date information
please contact your local Consulate General of St Lucia, or contact one
of our agents.
Example of a full listing here - http://www.guidetostlucia.com/returning-residents.html
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