- Investing in Saint Barth to Make Your Dream Come True? This Is What You Have to Know
- May 8, 2017
- Law Firm: Emmanuel Jacques Almosnino - Gustavia, Saint Barthelemy Office
- In the last several years, the real estate transactions on Saint Barth began to manifest a noticeable increase in frequency, with a number of roughly twenty to thirty operations taking place annually.
Saint Barth, also called Saint Bart’s ("Saint-Barthélemy" in French) is an island of small dimensions, but it has already proved promising when it comes to real estate investments and development.
In fact, it is probably the sole Caribbean island that witnessed an uninteon in the real estate segment, even during the recent economic recession. Moreover, in the last several years, the real estate transactions on the island began to manifest a noticeable increase in frequency, with a number of roughly twenty to thirty operations taking place annually.
The attractiveness of the local market of immovable assets is confirmed by the multiple public figures who have already entered it, and the fact that the prices always followed a positive trend, reaching the peak of the global real estate luxury market.
Against this background, for those convinced by the potential of this destination, wishing to acquire real estate property in Saint Barth, there are some particulars to be taken into account.
One of the most important aspects is probably that the island is almost tax-free, thanks to it lacking debt. Except for their consumption of utilities (water, electricity, and gas), there is no income tax paid by the 10,000 residents. Here, the main tax resources of the Island are the registration tax applicable to the sale of properties (4.80 %) and of businesses (1.40%), the real estate capital gain tax (20%), the touristic tax of 5%, imputable on the profits gained from the rental of the immovable, and the custom duties of 5%, applicable on all imported goods.
In what regards the sale and purchase transaction itself, these operations are usually conducted with cash, using the local currency (the Euro) to fix the price but also the U.S. Dollar, provided the parties mutually decide so. Given the important size of these deals, mortgages are rather difficult to obtain and also non-practicable, due to the liquidity of the market.
As far as the formal procedure is concerned, the transfer of a property takes place using the services of a notary ("notaire"), who is essentially an officer appointed by the French government to handle the land registry. It has to be mentioned that the transfer taxes, land registry fees and notary's fees entitled by the sale will normally amount to about 6% of the total price, and are usually borne by the buyer.
Finally, notwithstanding the illusory triviality of this kind of transactions, generally alleged by the brokers, the acquisition of an immovable asset on the luxurious island requires particular prudence and great care, especially in what regards the structure of your investment.
It is highly recommended to resort to the specialized assistance of an experienced attorney, who will advise you on essential matters such as the optimal venue of the real estate, depending on the purpose of your acquisition, your financial expectations and life-style.
Some potential stringent issues that need to be assessed are, for instance, if despite the marvelous view from the property, the adjoining lot could be developed into blocking it, or establishing whether a land can be classified as "green zone" meaning that any construction is prohibited there, or if the surface area that you can build can be insufficient for the villa of your dreams, easements can affect your property's worth, etc.
A qualified attorney will also help you with the estate planning and any tax planning issues, and will analyze and manage, to the best of your interest, the characteristic implications and prospective risks of the procedure, as well as matters concerning financial planning and future management of this wealth.
Emmanuel Jacques Almosnino is a highly reputed law firm, both locally and internationally, with a broad, well-established portfolio in this field. The firm will negotiate the deal on your behalf, secure your transaction in the most optimal conditions, and provide a full, “turn-key” service, in order to ensure that, the otherwise complex, process of acquisition is as simple and smooth as possible.
Having worked with VIPs for over 20 years in offering support in real estate transactions in Saint Barth and internationally, EJA’s solid expertise combines financing, structuring, and acquisitions. These credentials enable the firm to provide top quality legal services for your future property purchase on the island of Saint Barth.