Terra Online: St Lucia Real Estate Blog

New Property Sales Tax Legislation

2010-08-26T16:08:00.000-07:00

We have just received a copy of the new legislation relating to the stamp duty and vendor's tax payable on the sale of property. There are major changes in the fees payable for the sale of property held by a company and we will be updating our client information accordingly.

The new rules take effect immediately and therefore apply to all future sales as well as sales that are in progress but not yet completed.

You may click on the following documents to view:

- New Stamp Duty Regulations
- Vendor's Tax Schedule

BACKGROUND

To date, many people have found it convenient to establish a company to hold property in St Lucia (single asset holding company) as the sales procedure entails transferring the shares of the company to a new owner, thereby conveying its assets (i.e the property) in the process. Such share transfer transactions attracted stamp duty of 0.5% of the value of the company and was payable by the purchaser.

The new legislation states "providing that at least 75% of the open market value of the assets of the Company or Corporation comprises immovable property" (which is normally the case with such holding companies) then stamp duty - including vendor's tax - shall be payable.

NEW RATES FOR COMPANY SALES

Stamp duty payable by the purchaser - 2%

The rates for corporate vendor's tax payable by the vendor are now the same as those that have applied for some time to non-company sales and are as follows:

Where the vendor is not a citizen of St Lucia or is a foreign company - 10% of value
Where the vendor is a citizen or local company: 2.5% - 5% depending on value

Terra Online sponsors 2010 Kitesurfing Fiesta

2010-03-30T18:12:00.000-07:00

Terra Online was one of the main sponsors of the 2010 St Lucia Kitesurfing Fiesta held at The Reef Kite + Surf in Vieux Fort on 27th-28th March. The event spanned two days and attracted both professional and amateur contestants from around the world.

Melissa Gil, professional kitesurfer and current kitespeed world champion kept the women's field on its toes, while Jeremie Tronet, internationally-renowned professional rider put the men through their paces. Heading the team of judges was Damien Leroy, professional kitesurfer and the 2008 US National courseracing champion.

Sandy Beach is one of the top kitesurfing locations in the Eastern Caribbean and the annual Kitesurfing Fiesta brings together world-class action on the water and a great St Lucian party atmosphere on land. Night time entertainment this year included live music from "4th World" reggae band and "Off-Island" Rock band, while food booths provided a variety of scrumptuous St Lucian fare from fresh seafood to Rastafarian 'ital' dishes.

Terra Online is proud to be associated with this kitesurfing festival which is a community-based, not-for-profit venture endorsed by the Ministry of Tourism.

Overall Results:

Pro Women
1. Beth Lygoe (St Lucia)
2. Melissa Gil (Costa Rica)
3. Linn Svendsen (Norway)

Pro Men
1. Jeremie Tronet (Martinique)
2. Mickael Neral (Martinique)
3. Benjamin Todd (UK)

Amateur Men
1. David Heritier (France)
2. Nicholas Borgne (Martinique)
3. Tim Fishleigh (Dominica)

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St Lucia among 'Top 10 Second Home Markets'

2009-12-15T09:44:00.000-08:00

International Property Journal recently ranked St Lucia among the top 10 vacation-home destinations offering the best potential for luxury, relaxation, adventure and rental income. The list is presented in no particular order but includes such locations as RIVIERA NAYARIT (Mexico), NATAL (Brazil), HERMOSA (Costa Rica) and PLACENCIA (Belize).

"Of the emerging islands in the Caribbean, St. Lucia has all the elements in place for steady growth. Its array of spectacular coves and beaches is augmented by its unique Creole culture, pristine twin Piton peaks and swatches of rainforest, a rarity in the Caribbean.

More importantly, investment money is flowing to the island, which is still in a relatively early development stage. Many of the second home projects are clustered on the north end of the island around Rodney Bay, where there are clusters of luxury homes. A fairly easy drive from the international airport as Castries, the area offers classic Caribbean style at prices below the sky-high offerings in Barbados."

Read the full article here.

Amy Winehouse knows a thing or two

2009-04-04T09:52:00.001-07:00

The internet is ablaze with the news that singer Amy Winehouse jetted back into St Lucia on Thursday with a view to buying property here. The star has spent several holidays on the island in the past and is known to have fallen in love with St Lucia.

Apart from purchasing property, Ms Winehouse is also slated to perform at the annual St Lucia Jazz Festival which is being held in May of this year. She joins a growing number of celebrities who have discovered that St Lucia is not only a great place to escape to, but that in terms of investment, owning property here makes a whole lot of sense.

Update:
Incidentally, just to show how wrong news reports can be, we did sell Shingle Cove (the property referred to in the article below), but we did not sell it to Amy! Click here to view our listing

The following article is reprinted from The Daily Star:

AMY ISLE-HOUSE!
21st May 2009 // by: By Tom Hutchison

Amy Winehouse loves St Lucia so much she is eyeing up a £3.2million permanent home there. The pop wreck has her heart set on the 2.5-acre exotic tropical estate called Shingle Cove.

The luxury holiday hotspot boasts six bedrooms, six bathrooms, a massive swimming pool and private security guards.

Amy, 25, has spent the last few months stopping on the Caribbean isle. The oceanside resort is set back in secluded forests and has a superb view of all the millionaires’ yachts sailing to and from the island.

It even has a team of staff on hand at all hours to meet guests’ every whim.

Rehab star Amy is currently renting a similar resort while she perfects her comeback stage show and records new material. She said: “I’m in the best place I’ve been for ages.

“I’m getting lots of exercise and have been able to relax.”

And her recent poor performance at the St Lucia Jazz Festival certainly has not put her off the island.

Terra Online 'Cash'-es in with sale of Marquis Estate

2009-04-01T10:30:00.000-07:00

Caribbean property resort firm signs up with tennis legend
March 30, 2009 by OPPE News

Reprinted from www.offplanpropertyexchange.com

Pat Cash (L) with Dave Ames (R)

A resort property company with developments in the Caribbean has signed up tennis legend Pat Cash to develop a series of academies.

Harlequin Hotels and Resorts said Australian Cash will be involved in developing coaching techniques, following a previous deal the holiday real estate firm signed with Gary Player to back a golf course in Saint Lucia.

The company has current property developments in Barbados, Saint Vincent and the Grenadines, Dominican Republic and Saint Lucia. Other real estate projects are expected to be announced in the near future, including a new development in Brazil.

The firm also said investors can use self-invested personal pensions to fund purchases, opening up a buy to people whose pensions may have been hit during the current financial crisis.

Dave Ames, chairman of Harlequin Hotels and Resorts said: “We are privileged to now be working in conjunction with one of the most universally recognised tennis legends of the modern era.

“The coming months and years will see Pat and Harlequin working closely together in order to create Pat Cash Tennis Academies.”

Harlequin added its property prices start from £95,000 ($136,102) and investors get a rental guarantee of 10 per cent of the original purchase price for the first two years, paid from completion.

Its partnership with Gary Player involves The Marquis Estate on the north east coast of St Lucia and the transformation of a former banana plantation into a top beach real estate scheme. The development involves an 18 hole course bearing Player’s name, plus Player-branded hotel and residential villas developed an designed with Player Real Estate.

An island of prosperity as storms ravage world housing

2009-03-16T07:45:00.000-07:00

As property investors and people hoping to retire abroad struggle to find a safe haven in the slump, St Lucia could offer a solution.

By Julian Knight
Sunday, 8 March 2009

The credit crunch has put paid to property booms around the globe, right? No, not quite. While the US, UK and European property markets are in price freefall, the Caribbean, and in particular the holiday island of St Lucia, seems to be holding its own – for the time being at least.

"Property prices have remained robust throughout the financial crisis," says Allen Chastanet, St Lucia's minister for tourism. "The key is we didn't have a boom to begin with, so building levels were at sustainable levels. Therefore, we're not having a bust.

"The only price softening that has taken place has been reflective of the pound weakening against the dollar," he adds, with reference to the fact that St Lucian property is priced in dollars. "Sellers have been willing to bend prices a bit for British buyers to reflect this currency shift."

The sales are still coming. At the island's Cotton Bay resort, for example, stage two of a building programme has just been completed, with 22 two-bed villas priced between $360,000 (around £260,000) and $450,000 all sold in rapid time. Some one-bed flats priced at $290,000 were also sold.

St Lucia's profile is high at the moment, with singer Amy Winehouse pictured holidaying there. The island is small, no bigger than a medium-sized English county and with a similar population to Peterborough. It is mountainous, with dense rainforest vegetation and lots of inlets and sandy beaches. And property, while not as affordable as hotspots such as Spain or Florida, ranges in price from around $300,000 right up to $4m. Most developments tend to be gated, with on-site shops, boutiques and restaurants. Access to a beach and pool area is normally a given.

Some homes are sold as owner-occupier, perhaps to people looking to retire to a hot climate, with direct flights from the UK through Virgin and BA. However, most of the properties on the island are pitched as an investment.

"What generally happens is that the buyer has the right to use the property for a calendar month each year, say, and the rest of the time it is rented out to holidaymakers," says Naomi Cambridge from the Sugar Beach resort, a 190-acre development. "The rent then provides an income for the owner."

Ms Cambridge reckons that investors can expect an annual return of 7 to 8 per cent. However, the Sugar Beach resort is top-end, reflecting its location in the middle of a world heritage site. Prices start at $705,000 for a one-bed villa with a pool, but in high season tourists fork out up to $1,200 a night to stay there.

Even in these recession-haunted times, it seems that visitors from America, Canada and the UK are willing to pay such prices. Ms Cambridge says average occupancy rates at Sugar Beach are 80 per cent over the past two years, and similar statistics are claimed by The Landings resort for the high season, which runs from January to April.

Properties at The Landings can be either owner-occupied or rented out. Prices start at $550,000 for a one-bed home and $750,000 for two bedrooms and direct access to the beach and boat moorings, as well as other resort facilities such as a spa, gym and restaurant. "We find that our owners want to stay here for a while and then rent out the rest of the time," says Oliver Gobat, director of sales. "What we do is put the profits made across the resort into a big pot and then the owners get paid an income according to their square footage and how many nights it's available to rent."

In the case of The Landings therefore, investor income relies on the resort as a whole making a profit. At some other resorts, investors receive a cut of the total revenue instead.

"It's important to check the terms of the income you receive," says Miranda John, international manager at mortgage broker Savills Private Finance. "Do your homework and ensure you visit the property. If the resort seems dead then it may not be making a profit, in which case you're unlikely to get much of a regular income. You'd have to rely on capital growth instead."

Ms John adds that it's harder than it once was to fund a purchase in the Caribbean, but far from impossible. "The number of UK banks willing to lend on a property there has shrunk to some four or five big names, but that still represents a choice. There is also the option of a local bank like First Caribbean, although that can be time consuming due to bureaucracy."

Crucially, unlike other holiday-home hotspots, St Lucia hasn't suffered from the blight of poorly conducted valuations. "Generally, those assessing the value of property on the ground have been robust in the way they have gone about things, and this helps in getting a mortgage as banks can have confidence in the figures," adds Ms John.

As a result, mortgage rates have not risen as much as they have done elsewhere, with borrowers generally being charged around 2.75 per cent above US Libor – the rate at which American banks lend to each other. The maximum loan to value varies between 60 and 70 per cent, and income multiples of three to four times are also achievable. However, purchasers looking to borrow against potential earnings from letting may struggle. "If you're doing this as a buy-to-let then the banks are still going to want you to be able to make your repayments from your own income, rather than any rental money the property brings in," says Ms John.

The property-buying process is similar to in the UK, except you have to obtain the rather ominous-sounding "aliens landholding licence", arranged through a local lawyer at a cost of $1,500. If the property is part of a resort development, and the overwhelming majority are, then service charges may apply, based on square footage. If the home is rented out, expect service charges to be higher as regular cleaning has to take place.

The biggest bugbear, though for Britons looking to buy in the Caribbean or America is the collapse in the value of sterling. A year ago, the pound was worth two dollars; now it buys around one dollar forty cents, and it may sink further. Against this backdrop, Britons looking to purchase property in dollars could consider taking out what is in effect a futures option contract. Put simply, you purchase an option to buy a set amount of dollars at a specific date in the future at a set price, so insuring yourself against any adverse currency moves between making an offer on a home and having to find the cash to pay for it.

Regardless of currency fluctuations, Ms John says buying in the Caribbean is only for those with deep pockets: "This is not a cheap undertaking as it's a top-end holiday destination. But that makes it a little less sensitive to the world economic downturn."

Reprinted from The Independent Newspaper (UK)
Click for original article

Alien moves afoot

2008-11-03T12:56:00.000-08:00

The 3-month wait for an Alien License may soon be a thing of the past. Talks between the Government of St Lucia and the Allied Realtor's Association are focused on finding a faster and more progressive way forward for the processing of 'Alien Landholding Licence' applications.

At the moment, non-nationals (both individuals and entities) wishing to purchase, lease or otherwise hold property in St Lucia are required by law to first obtain an Alien Landholding Licence (ALL). This licence is specific to a given property and is non-transferable. It permits foreign nationals to register property in their name once they have gone through a screening process that ensures, amongst other things, that they are free of a criminal record and have adequate means of support.

Although time-consuming, the process is actually pretty straightforward as the purchaser's lawyer takes care of all formalities as part of the conveyancing process - the purchaser simply has to provide the following information and documents:

Certified copy of passport
Fingerprints of the applicant
Four (4) passport-sized colour photos of the applicant
Profession or employment status
Bankers’ reference
Police Certificate of good Character from country of origin or current residence.

Additionally there is a non-refundable application fee of EC$1,500 (US$560) and once approved, the fee for the actual licence is EC$5,000 (US$1,870). The good news is that this is a one-time licence fee, but the bad news is that currently, the processing time for the application can be in excess of 3 months. Our record for the turn-around time on obtaining an ALL is 6 weeks, but this is the exception rather than the rule. So the recent talks have centered on how the process can be fast-tracked whilst still making sure that applicants still satisfy all the requirements.

There was a general acceptance that obtaining fingerprints from police departments in some countries can be a challenge in this day and age, and that perhaps this requirement was somewhat '20th-century' in approach. Obtaining a Police certificate showing one's (lack of) criminal record can also take several weeks in some countries, often requiring the applicant to appear in person. Added to these hurdles are the potential delays in processing time once the application enters the bureaucratic mill and makes its way through the various local government departments.

The consensus is that perhaps fingerprinting can be done away with, and that applicants can simply sign a statutory declaration to the effect that they do not have a criminal record. At this point the applicant can be granted a licence allowing them to proceed with the purchase and registering of the property... saving everyone a lot of time and frustration.

With this scenario, the onus will be on the purchaser not to make any false declarations, since all background checks will still be carried out, but just not in advance of the sale. Should any criminal records etc. surface after the sale has gone through, an applicant stands to forfeit their property. Draft legislation to this effect will be reviewed by the Realtor's Association within the next few weeks and barring any unforeseen complications, hopefully, these changes will be in place by February 2009.

Oh ... and it has also been suggested that the word 'Alien' be abandoned in favour of the less exotic term 'Foreign National'.

A match made in heaven

2008-03-20T08:55:00.000-07:00

When the emailed enquiry came through to our offices, our very first reaction was 'surely someone must be playing a practical joke'? Here was a very specific request from a developer for a rather unusual property - and the requirements almost exactly matched a listing that we had recently taken onto our books: 100+ acres, working cocoa plantation, great seaviews etc...
Naturally we treated the enquiry seriously and it quickly emerged that the request was genuine - this really was to be a match made in heaven.

With not a moment to be lost, we worked hand-in-hand with both parties to formalise the sale and as the developers, Hotel Chocolat, state on their website: "... after a long and difficult search, we found what looked like an ideal old estate in St Lucia. Co-founder Peter Harris and I shot over and in the face of strong competition signed contracts within a week to buy Rabot Estate."

The story of Hotel Chocolat at Rabot Estate in St Lucia has to date been one of successful collaboration with the local community and of governmental support.

The Hotel Chocolat website best explains the project:
"... Our move to buy a cocoa estate goes against the overall trend in the chocolate market, which is to specialise more and more in a particular part of the chocolate making process. However we decided to do it for these reasons:
a) We can make it a successful West Indian business in its own right.
b) It fits with our Engaged Ethics programme.
c) The future battleground in super premium chocolate will be about true chocolate expertise.
Our cocoa estate connects the origins of chocolate (cocoa growing) directly with our consumers. We are one of the very few in the world market to do this. Our plan to make it a successful West Indian business is in three phases:

1. Re-establish Rabot Estate as a viable, thriving cocoa grower.
2. Build a chocolate factory in St Lucia.
3. Build a boutique chocolate hotel."

THE ROYAL VISIT

On 7th of March 2008, as part of their Caribbean tour, HRH The Prince of Wales and The Duchess of Cornwall visited Rabot Estate for the ground- breaking ceremony of the chocolate factory.

Terra Online is proud to have been a part of this success story.

St Lucia Property Alert

2007-12-16T08:40:00.000-08:00

Just a quick note to introduce our property alert newsletter. To receive this by email you can sign up via our St Lucia property website or else you can view the archived copies by clicking here.

Why not subscribe today and stay up to date?

Puttin' on the Ritz

2007-12-11T07:21:00.000-08:00

The staff of Terra Online were among invited guests at the ground-breaking ceremony for the Ritz-Carlton five-star resort at Black-Bay in Vieux Fort.

Dignitaries and other guests braved somewhat grey skys to witness Prime Minister Stephenson King and the principles of Roebuck International turn the first sods of soil for what is to be Vieux Fort's first ever luxury villa, marina and golfing resort. The project is a joint venture between Roebuck international, an Irish development company, and the government of St Lucia. The property will be managed by the Ritz-Carlton group.

The development is to be spilt between two locations - one on a Caribbean site at Black Bay and the other on the Atlantic coast in the Savannes Bay area. The Black Bay location will be home to the Ritz-Carlton Hotel & Spa, the Ritz Residences (condominium suites and beachfront villas ) and marina, while the Atlantic location will feature the Arnold Palmer and Christy O'Connor Jr signature golf course & club house, estate homes, golf cottages was well as a member's beach club.

The resort includes a world-class spa, tennis, championship golf course, water sports, and numerous dining options. According to The Ritz website, these include "The Restaurant for all -day dining, The Lobby Lounge for traditional light fare, hors d' oeuvres, cocktails and afternoon tea, and The Beach Bar & Grill for casual cuisine. In addition, The Clubhouse Restaurant and The Clubhouse Bar offer casual dining and cocktails for golfers and members. Provisions found at The Gourmet Shop will enable you to create a sumptuous dining experience in the privacy of your suite."

PHOTOS

Prime Minister Stevenson King and guest

PM King accepts a token of appreciation from
Neal Sweeney, president of Roebuck International

Hon. Minister Ausbert D'Auvergne

Former Prime Minister Dr. Kenny Anthony (L)
and Hon. Minister Arsene James (R)

Senator Allen Chastenet
Minister for Tourism

Ms Janine Compton (L)
Member of Parliament - Micoud North

Mr Nicholas John
Chairman - National Development Corporation

Mr Des Roach -Master of Ceremonies
and St Lucia representative for Roebuck International

Mr Joseph Harris - Harris Brokers (L)
Mr Franz Louis-Fernand, owner Fox Grove Inn (R)

Mrs Bonnie Zephirin
Owner/Developer - Castles in Paradise Luxury Villas

Orlando Satchell - Executive Chef (L) &
Robert Stewart - General Manager (R) both of Ladera Resort

Robert 'Zi' Taylor serenades the crowd