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Real Estate Frequently Asked Questions
Below we will provide a selection of some of the most commonly asked questions for those who are curious as to what there is to do on the island of St. Maarten/ St. Martin, those who have questions on buying a property (whether it be villa, apartment, land, condo, or commercial space), and finally those who are selling can also find some answers in the following FAQ
Can a foreigner own real estate in St. Maarten / St. Martin?
Yes. Anyone can own on both sides of the island. What’s more, you are protected by Dutch and French law.
What about title searches, closing, etc.?
All European Notaries are of legal backgrounds, they must first be lawyers. They are representing Federal laws when passing a property from Seller to Buyer. The Buyer is made aware of the type of deed. The Notary also insures free and clear title; if a mortgage is involved, the Notary will register the mortgage instrumental as well as the Deed with the kadaster (Land Registry Office.) Title insurance is not necessary. Closing costs on Dutch St. Maarten are about 5%. On French St. Martin, they vary from 9% – 11%.
What type of Deed does a Buyer receive?
There are three (3) types of ownership: fee simple, government long lease, and private long lease. All ownerships are a Deed registration and are transferred by the appointed Notaries. Again, title insurance is not necessary
What kind of tax would I expect to pay as a property owner in St. Maarten / St. Martin?
Transfer taxes are included in the closing costs. As far as real estate taxes on Dutch St. Maarten, there are no annual property taxes unlike most other countries. The French side does assess an annual property tax. However, if you own a property that you use as a “rental property”, you would be responsible for an income or profit tax. The good news is that you can deduct expenses, such as maintenance, insurance, improvements, etc., and in most cases deductible expenses will offset income.
What capital gains taxes do you pay when you sell your St Maarten property?
There are no Capital Gains Taxes on Dutch St. Maarten.
What about ownership other than in your own name?
A property can be held in a corporation or offshore company’s name. We will be able to give you more detailed information.
Our intentions are to be here only part time or perhaps longer after retirement. What are our alternatives?
An investor can realize added income from using the property as a “vacation villa rental” when not in residence. During “high season” (December – April), short-term villa rentals are priced from $1,200.00 USD to $10,000.00 USD per week – even more for larger beachfront or luxury villas; approximately 25% less during the remainder of the year.
If you decide to rent your home, we are property managers and can arrange all of the details for you and your vacation renters. We will meet guests at the airport with keys to their rental cars and escort them to their vacation home, which awaits them with fresh cut flowers and refreshments! Our host will acquaint the guests with the villa, maid, and the services that we provide, everything from private gourmet chefs to whatever their hearts desires!
How is interest calculated on a mortgage loan?
Most mortgages originated today calculate interest in arrears, unlike consumer loans which calculate interest to the date of payment receipt. As an example, when borrowers pay their February mortgage payments, they are paying the January interest. This method of calculating interest is based on a 360 day year in which each month has 30 days.
Tell me more about property management.
We, as property managers, become your owner representatives. We look after the payments of bills and all matters pertaining to the maintenance of your property. Because of our years of experience, we have a vast network of service agencies at our disposal to ensure that your investment is adequately protected. We tailor our management program according to your specific needs
What about building and remodeling?
Our Associate Architect can not only design your new home or your remodeling plans, but advise and supervise from beginning to end your construction needs.
What about buying furnishings, decorating items, renovating materials, etc.? Can we find it on the island or will we need to ship everything to the island?
You will be pleased to know that you can find almost everything you will need here on the island. We have numerous agency services and suppliers at our disposal and we will be happy to make them available to you.
Do I need a residency permit to live on St Maarten?
- In order to live in St. Maarten permanently one has to be a resident and therefore there are standard immigration procedures.
- A none-working residence permit can be requested for persons seeking no employment by simply proving of a sufficient income from abroad to assure an independent living standard.
- For persons wanting to open a business and therefore seeking a working residence. Please contact legal representation.
- Visiting vacation – there is a 90 day maximum permission to visit. For more details to the above, please contact the immigration department or seek legal advice.
What is the investment climate like in St Maarten?
St. Maarten’s Government is friendly and helpful for anyone wanting to invest and be active in Industry and the Tourism Sector. For more information inquire at Haute Properties or directly with the Commerce Department of St. Maarten.
What is an Offshore Company?
In real terms an offshore company is a corporation that is owned by a person who is a resident or citizen of a country other than that of the country in which the offshore corporation is incorporated. The Company is “offshore” from his own country, hence the term “offshore company”. Persons prefer to form companies in countries which have zero or low tax rates and which also have laws protecting their privacy and confidentiality. Anguilla and Nevis are attractive jurisdictions for forming offshore companies because of their zero tax rates, confidentiality laws and also because companies can be incorporated quickly and at low cost.
Why should I own my property in an offshore Company?
Offshore companies are formed for doing all manner of property transactions. Real estate is particularly suitable for offshore companies. It simplifies ownership and is an excellent form of asset protection because it insulates the owner of the offshore company from any personal liability for example to persons who suffered any harm while occupying the property as tenants.
Also on subsequent sale of the property, there is only need for a simple share transfer rather than a complex closing involving transfer of ownership at the Government Land Registry. Ownership of the land remains in the name of the company, thereby reducing many of the costs on transfer.
It also simplifies the passing of the property to the children because only a simple share transfer needs to be prepared and signed or, alternatively, the shares of the company can be passed by preparing a simple Anguilla or Nevis will or trust.
What about inheritance laws? When I pass away what happens to the property? Will it pass to my wife and children?
There are various tools available to ensure that the property passes on to family members separately from your “on-shore” property. The husband and wife can own the shares of the company jointly. Joint ownership ensures that the property will automatically pass on the death of the husband or wife to the survivor. Also the making of a simple Anguilla or Nevis will or trust ensures the smooth transfer of the shares of the company onto the children or other family members.
Is it possible to have a bank account for the offshore company?
Yes. We will assist you in opening a bank account for the offshore company. The bank account can be opened in Anguilla, St. Maarten, Nevis or another country if preferred.