St Lucia
General Information and background:
The basics – Saint Lucia is (yet another) beautiful Caribbean island, world-renowned for its “Pitons” – two, sharply-pointed, dormant, volcanic spires, which have adorned countless thousands of postcards. This is also Oprah’s favorite place and part of the recent investment activity is, in some part we’re sure, due to her honorary efforts on behalf of the tourism committee. The island was given another boost by hosting the 2007 Cricket World Cup.
Saint Lucia is located in the middle of the Lesser Antilles chain, in the southeastern portion of the Caribbean Sea, only 200 miles from the Venezuelan mainland. Martinique is its closest neighbor, roughly 21 miles to the north and Saint Vincent nearest to the south, about 26 miles away. The island is 27 miles long (north to south) and 14 miles wide (total area of about 238 square miles). Population is estimated at around 160,000, largely concentrated around the Capital of Castries, on the upper central western coast. English is the official language with some “Patois” spoken by locals (a French-based Creole). The island has been an independent nation since 1979, but remains a member of the British Commonwealth and retains much of its pre-independence, British Parliamentary rule and laws. Chains of title (including Queen’s Chain) follow typical British custom (more below on land title). Temperatures range from the mid-70s to the mid-90s with the humidity usually mitigated by trade winds. Rainy season is June to October with coastal areas seeing roughly 60” of rain a year and inland areas as much as 160” or more. Leisure activities include hiking, scuba diving and snorkeling the many reefs, deep-sea fishing, rain forest zip-line rides, tours of plantation ruins and the like. For golfers, there are several 18-hole and one 9-hole course with others in the works. St. Lucia is considered the sailing and yachting capital of the southern Caribbean. It is also well known for its many fine spas and romantic getaway spots.
Saint Lucia is located within the Atlantic Standard time zone (same as Eastern Daylight Savings time in the US and one hour ahead during Eastern Standard time). Currency is the Eastern Caribbean Dollar with a fixed exchange rate of $2.65-70 to $1 US (but good luck getting this favorable a rate at shops or restaurants). Local banks commonly exchange currencies. Driving a rental car or owned vehicle can be done via a temporary driving permit, which costs $22 US and is good for a three-month period. These permits can be obtained at rental car counters, airport offices or police stations. Taxis or resort shuttles are the preferred means of transportation, though one may travel inexpensively via the bus system (which often takes the form of “gypsy” vans). Driving can be a bit challenging as the roads are generally poor and quite winding through the interior portion of the island. There are also few direct routes to get from place to place.
Accessibility/Getting there – Saint Lucia has a very good main airport (by Caribbean standards) with direct flights in from a variety of locales. Hewanorra International (UVF airport code) is located in the extreme south of the island in Vieux Fort (a long 1-2 hour shuttle ride from the Castries and Rodney Bay areas, but a more manageable ride to Soufriere). North American cities with service into UVF include: Miami (3 hours), Atlanta (5 hours), Charlotte (5+ hours), NYC (6 hours), Chicago (7 hours), Philadelphia (6 hours) and Toronto (6 hours). UVF receives other long-haul flights via British Airways, Virgin Atlantic, British Midlands and Air Jamaica. Additionally, there is a second, much smaller airport just north of Castries, known as George Charles Airport (f.k.a. Vigie Airport – airport code SLU), which gets mostly inter-island flights, including American Eagle via Puerto Rico. Visitors will note a $26 US departure tax from either airport.
Desirability for investment - Much like other Caribbean destinations, St. Lucia's appeal to prospective real estate investors can be largely tied to the same appeal it holds to tourists, namely: weather, scenery and Caribbean Sea activities. Transfer fees and taxes are fairly steep as discussed below, but prices have not appreciated as quickly as some areas of the Caribbean. Surprisingly, one large component of the recent influx of investment dollars has been nearby Trinidad and Tobago, whose oil revenues and other newfound wealth has found its way to St. Lucia. The beauty of the Pitons area, the Marigot Bay area (where the original Dr. Doolittle movie was filmed) and other areas is virtually unrivaled – even in the Caribbean – and will always draw throngs of tourists.
Investment Appeal:
**A note on infrastructure – public electricity, wired telephones, internet and the like are available around towns, but less so in more rural areas. Mobile phones are widely available. Power is 220 volts and either provided by petroleum-fired generators from the power company or personal generators in more rural areas. **
The tax and land use landscape of Saint Lucia
Rental: Rental of properties is difficult to generalize… Caribbean rules apply. There is a high season of about four months (December to April) and a big drop-off to the off-season. Costs tend to be cheaper than in many of the heavily-touristed Caribbean islands, while rental rates are probably above average – depending on the quality of accommodations, of course. Management or caretaker services, housekeeping, carrying costs, etc. are all pretty low here - more in the 10-20% range than the 30% plus to be seen in most destinations.
Ownership and Title Information: Overseas purchasers can only take an interest in land if they obtain an Alien’s Landholder License from the government prior to the purchase (non-refundable $1,850 US Dollar application fee). The License applies only to the property acquired and is not transferable or assignable. It may take more than 3 months to obtain. Fees range from about $3,700 US for parcels from 1 to 10 acres in size and escalate from there to over $18,500 US for parcels larger than 100 acres. In addition to the Landholder’s License, expect to pay 2% in stamp duty, further conveyance charges of 3-5% to the local solicitor and attorney’s fees for the procurement of the License and handling of the transaction. There is a further mortgage fee (if one is obtained) of 1-1.2% paid to the government to register the mortgage interest.
Until recently, most residence options consisted of purchasing existing homes or buying land and constructing. While constructing remains a significant portion of investment, there are more and more options to buy into new housing developments and condominium developments. If you are trying to estimate costs of construction, a good rule of thumb for St Lucia is about $60-100 US per square foot with additional costs for building on a steep slope or difficult to access area. For those thinking of buying and holding land, be aware that the Alien’s Landholder License will likely require construction to commence within two years of purchase and completion within four years.
Residency is generally only allowed for native St. Lucians and those who marry them. There are income taxes charged to residents as well as numerous other taxes, including hotel taxes and the like.
As of February 2007, St. Lucia is instituting a property tax. Some areas have seen this tax implemented and others are still waiting. There are 2 separate forms of this annual property tax: one for landowners of 0.5% of the property value; and a second for rental properties equal to 5% of the annual, assumed rental revenue (e.g., if a property is presumed to rent for $2,000 a month, the annual, assumed rental value will be $24,000 and the tax $1,200).
Title is usually freehold, but there remain a number of areas where the "Queen" still holds title under Queen's Chain. This can be a problem to potential buyers and will require additional approval(s) to buy and to build. Queen's Chain seems to be more prevalent along the waterline, for example within some of the Caribbean side bays and coves where large tracts have recently been broken-up and are being sold sub-divided.
DIFFERENCES FROM ONE AREA TO ANOTHER - "NEIGHBORHOODS"
The most touristy and developed portion of the island is the Rodney Bay area in the northwest. Just south is Castries; the capital, the cruise ship port and the island’s population center. The next largest city is the more French-influenced Soufriere to the southwest, which offers stunning views of the Pitons. The center of the island is sparsely populated, hilly, very rugged, has few real roads and almost no infrastructure to speak-of. Large banana plantations and rainforest dominate the landscape here. ** A quick note on beaches: there are not many stretches of great beaches on St Lucia. The sand is coarse and darker than in many islands further north. The nicest beach on the island is considered to be Reduit Beach in Rodney Bay. ** As one might expect, the Atlantic side is rough and blustery with strong wave action and rocky coves. This does, however, make for some spectacular scenery. The leeside is much calmer and has numerous picturesque coves.
Like most of the Caribbean basin, St Lucia is without a MLS system to help in your search for properties. Listings can be difficult to find and quite scattered among the various brokers. The overwhelming majority of existing homes are located in Gros Islet (the northern 5% of the island), the Rodney Bay area to the northwest and Castries just south of Rodney Bay. Soufriere to the west, southwest of the island is the next largest area of development. Vieux Fort to the very south and the areas to the southeast and east are just beginning to see some significant development interest.
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