St Kitts and Nevis
The basics – The islands of St. Kitts and Nevis (pronounced Knee-vis by Caribbeaners), two former British colonies, are located in the center of the Leeward Islands, roughly due east of Puerto Rico and the other Greater Antilles. St Kitts is the larger of the two islands at about 65 square miles with smaller Nevis at 40 square miles located just two miles south of St Kitts (and readily accessible by boat, roll-on/roll-off ferry or very brief plane flight). By the way, St Kitts is really Saint Christopher, but we’ve never heard anyone outside of the government call it that! Prior to 2003, the federation depended entirely on sugar cane for its economic survival. When the government – grudgingly – conceded that it was time to move on, they stopped bailing-out the unprofitable industry and turned to financial services and real estate development for the future. Of particular note was the government’s interesting foray into real estate resulting in the Frigate Bay development on Kitts. Here is where the Royal St Kitts golf course, the sprawling Marriott development and numerous other developments, stores and restaurants have sprung-up. Restaurants and other vendors on the Caribbean beachside lease the land from the government directly, for example. Buying at a development in the area can have tax advantages (see below).
St Kitts and Nevis are mostly quite clean, fairly safe and rapidly modernizing in terms of amenities, infrastructure and day-to-day comforts. Most noteworthy indications of this modernization (and its up-and-coming stature) are: at least three new large-scale developments in the works on St Kitts including one by the Auberge Group (on roughly 2,500 acres!) and – purportedly a Ritz Carlton branded resort, among others. There is also a rare, north-end development of a little less than 400 acres on Kittitian Heights, including another 18-hole golf course. On Nevis this is represented by the long-time success of the Four Seasons (kudos to them for being well ahead of its peers in that investment) with its Robert Trent Jones golf course. Nevis seems to be seeing more villa and residential developments, such as Cliffdwellers, the proposed Pinney’s Estate and Red Hawk Ridge; though there are some smaller condo projects, such as Nelson’s Spring and a Hamilton area project. Expect a great deal more to come for both St Kitts and Nevis.
Both islands are quite hilly with some mountains sprinkled throughout. The highest point on St Kitts is Mount Liamuiga at around 3,800’ above sea level and Nevis Peak – obviously on Nevis – at over 3,200’ above sea level. Activities range from good (though not well-known) diving and snorkeling, boating, horseback riding and hiking to exploring the islands’ historical sites. The islands are located in the Atlantic Standard Time zone or GMT – 4 (or one hour ahead of Eastern Standard Time in the US, except during US daylight savings time, when the time zones are the same). The islands are on the Eastern Caribbean Dollar, which is typically tied to the US Dollar at about $1 US to $2.70 EC Dollars. US Dollars are accepted most everywhere and prices are traditionally given in US Dollars or in both currencies. The calling country code is 869, to which is then added 465-469 and the local four-digit number. English is the official language.
Marinas and yacht space are planned in the southern peninsula of St Kitts and will likely be a cornerstone of the new, large developments getting underway. There is an existing – Royal St Kitts – golf course on St Kitts in the Frigate Bay area as well as the renowned Four Seasons course on Nevis. Plans are underway for at least one and perhaps as many as three new courses as part of the new projects on the south end of Kitts. Additionally, there is an Ian Woosnam course being constructed as part of the Kittitian Heights project on the north end of Kitts. The St Kitts government has invested considerably in a new high-end shopping plaza next to the cruise ship terminal near Basseterre.
Accessibility/Getting there – The largest of the islands’ airports is Robert L. Bradshaw Golden Rock Airport on St Kitts (SKB), though Nevis’ Vance W. Armory (NEV) takes short-hop flights from St Kitts and some neighboring islands like St Maarten (SXM). There is direct jet service into SKB from a number of US domestic and Canadian airports though typically only during Caribbean high-season (December to April), with most arriving via connections from San Juan, Antigua or St Maarten. Flying time to St Kitts is about 2 ½ hours from Miami, closer to 4 hours from Atlanta or Charlotte and a bit longer from the New York area. There is usually a non-stop from London Gatwick (on XL Airways or other) with a fairly consistent schedule showing through the winter season, as well. Connecting service from Europe is the usual… from Spain, via Iberia to Puerto Rico, from Holland, via KLM to St Maarten, from France, via Air France to St Maarten or various UK carriers (including British Airways, Virgin Atlantic, BWIA, BMI) via Antigua, Barbados or St Maarten.
Desirability for investment – Strong points for Kitts and Nevis are the usual Caribbean draws, plus their rapid real estate appreciation, good ease of access and getting-around and a central location to the rest of the Caribbean (boaters take note). Dual or second citizenship also seem to be considerable attractions for many. Notably, there are requirements for development of land after purchase for non-residents – as part of your alien landholder’s license. Generally, assume three years (at most) to commence construction; though we received fairly puzzled looks when we inquired whether there has ever been any enforcement of this requirement. There is a fair amount of disparity on transfer fees. The two primary fees are: the transfer fee and the alien landholder's license (presuming the buyer is a non-resident). See below for tax information. *Some larger projects see these fees waived by the government, so do your homework.*
There appears to be a great deal of interest in the “economic citizenship” program whereby people who buy homes over a certain amount can “qualify” for expedited citizenship (for those desiring dual-citizenship or other advantages of a St Kitts-Nevis passport). When last we checked, the amount is $350,000 (any property with a purchase price of $350k or above likely qualifies) - the amount was just $250k just a few years ago. This has given birth to the strange phenomenon of people asking $350k for a home not worth that on the market, understanding that there is patent appeal at that price level. One fixer-upper our editors recently viewed is worth no more than $320-330,000, but was asking $350,000, by way of example – they didn’t want to price themselves out of a prospective buyer desiring citizenship. Be mindful that background check fees and other charges apply to the process after your closing on the property has taken place.
The tax and land use landscape of St Kitts and Nevis: As mentioned above, the two primary fees are: the transfer fee and the alien landholder's license (presuming the buyer is a non-resident). The transfer fee is 12% for houses or villas and 5% for condominiums (apartments) - both fees are paid by the seller. While this may seem quite high, the Alien Landholder's License fee is not required in the Frigate Bay area and is 10% throughout the rest of St Kitts and Nevis. PLEASE NOTE – the 10% applies to the actual purchase, so if you are buying raw land, the villa you may build on it later is not subject to a separate tax, just the land. ALSO NOTE that there are a number of larger developments which have gotten the fee waived for the initial purchaser. When it comes time to sell, you (and the buyer) will be faced with similar fees, so price them into your investment strategies. Be mindful of these charges and what they will be when it comes time to sell your properties!! There are no sales taxes on these islands but there is a reasonable property tax on both islands (e.g., from 0.5 to 0.8% on average in the high-end areas of Frigate Bay and the peninsula). Your only other significant closing cost will be a 1.5-2% attorney’s fee. This is one of the many islands where buying and owning real estate in a corporate name or offshore entity may have the benefit of preventing future transfer taxes being triggered upon sale (you sell the business, which owns the real estate and not the real estate itself, thus avoiding the transfer fees). Consult one of the numerous local attorneys or offshore business resources for further information.
There are a rising number of financial service companies springing-up in St Kitts-Nevis to accommodate the increasing demand for offshore companies, captive insurance companies, international exempt trusts, international insurance and offshore banking. Price Waterhouse Cooper even has a new office in St Kitts.
RENTAL: The majority of new developments on St Kitts are new condominiums and high-end villas in the areas of Frigate Bay and south to the peninsula. There is a strong market for long-term rental properties in that area, as there are few options for students and professors of Ross Veterinary School (numbering in the several 100s and residing on island for two years or more), corporate lessees and many others who compete for the few available properties. It is becoming more common for these people to go ahead and buy something temporarily, as the mortgage payment may be no more than their prospective rent, assuming they can even find a place! There are a number of realtors and other similar property managers to rent out your home or villa to the short-term vacationer, particularly during “season” from December to mid-April. Expect fees from 10% on the low-end for long-term rentals up to about 30% for short-term rental programs.
It is possible to have the costs of ownership (mortgage payments, utilities and homeowner’s association dues) covered by rental income. As in most places, be leery of any realtor who tells you that “you will cover all these costs and still make money”. While that can be true in some cases, rental income is typically better factored-in as an offset to ownership costs during a holding period, while one is hoping for property appreciation. You can conservatively hope for 60-80% of ownership costs to be covered by rental. If you can do better than that; great. Occupancy rates are difficult to determine and vary from long-term to short-term and seasonally. Some investors buy and long-term rent their properties and look forward to a time when they can enjoy the home for a seasonal residence, retirement home or permanent residence. This enables them to buy while the market is still reasonable, enjoy the price appreciation and lock-in a location for themselves down the road.
OWNERSHIP AND TITLE INFORMATION: Almost all land is freehold. Your attorney will verify that title is free and clear, but be sure that you are comfortable with the clarity of title on your land as there are frequently non-probated properties in dispute among siblings and these may come back to bite you if your attorney failed to do an adequate job of ensuring no future problems.
DIFFERENCES FROM ONE AREA TO ANOTHER - "NEIGHBORHOODS":
ST KITTS
On St Kitts, there are some developments for non-residents to the north end, but the majority of the interest and action appears to be from Frigate Bay south to the end of the peninsula (facing Nevis). Huge projects are all centered on the peninsula with branded hotel chains, golf courses, marinas and other ambitious options all planned. There is at least one golf course development toward the north end (e.g., Kittitian Heights or Rawlins Plantation Inn), but several smaller condo projects in that direction. Expect all of these developments to offer mixed-use lots, build-to-spec villas and condominium options. Generally, there are not many options across the center (and breadth) of the island, including the capitol of Basseterre and the airport as this area is tacitly reserved for residents, where they receive considerably favored treatment on taxes and fees.
NEVIS
On Nevis, the Four Seasons and its golf course on the island’s west side comprise one hub of activity with another area on the north and northwest coast (facing St Kitts) seeing a good deal of new development. The vast majority of activity, homes, developments and destinations are located from the northern (top) portion of the island around Oualie Beach counter-clockwise south to Bath Springs to the west southwest.
Realtors/MLS:
There are only a handful of realtors on each island and no formal MLS system. Most “deals” travel by word of mouth and getting the right agent can be difficult. At any given time, there are likely to be more informally for sale properties than formally “on the market.” Some title problems have been encountered where heirs have taken to arguing over and verbally splitting-up the inheritances, so choose your attorney carefully, as well.
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