Real Estate Practices in Sint Maarten
Property Ownership in Sint Maarten & Saint Martin
Foreign property ownership is offered on both sides of the island with Dutch law protecting those investing in Sint Maarten and French law protecting those investing in Saint Martin. If the purchase will be made in a person’s name, a passport or other photo identification is required. If the purchase is made in a company name, articles of incorporation and a statement showing the company is in good standing is required. It is not necessary to become a resident to own property on Dutch St. Maarten.
It is common practice to form offshore companies to facilitate property transactions. This simplifies ownership and provides asset protection. Owners of offshore companies are protected from any personal liability to persons who suffered any harm while occupying the property as tenants. The subsequent sale of the property requires only a simple share transfer rather than a complex closing involving ownership transfer at the Government Land Registry. Ownership of the land remains in the name of the company, thereby reducing many of the costs on transfer. This also simplifies property transfer to children.
It also simplifies the passing of the property to the children. A simple share transfer is prepared or the shares of the company can be passed by preparing a simple Anguilla or Nevis will or trust. Anguilla and Nevis have excellent trust legislation which provide for confidentiality and special asset protection.
Tax Incentives in Sint Maarten & Saint Martin
Transfer taxes are part of every transaction and included in the closing costs. There are no annual property taxes on Dutch Sint Maarten; however, there is one assessed on the French side of the island. Properties owned as rentals are subject to income tax on the rent received, regardless of island location. Typical deductions such as maintenance, insurance, improvements in most cases will offset income. There is also no capital gains tax on property sales on Dutch Sint Maarten.
Deed Transfers in Sint Maarten & Saint Martin
There are three basic types of deed transfers for real estate on Dutch St. Maarten: Fee Simple, Government Long Lease, and Private Long Lease, all of which give registered ownership. Properties located in protected subdivisions are Fee Simple (same as in U.S.). Properties are always closed using the European system where the Civil Law Notary, appointed by the Queen of Holland, is responsible by law to both parties and is obligated to do a proper title search to insure a clear title transfer. Since the responsibility of clear title is with the Notary, thus title insurance is not needed. Closings take place on St. Maarten, in English, within the time frame set by the Sales and Purchase Agreement. Closing costs are minimal, there is a one-time government transfer tax of 4%, plus the Notary's fee with the total of both amounting to no more than 6% of the gross sale price. These costs are the Buyer's responsibility.
Mortgages in Sint Maarten & Saint Martin
Title to mortgaged property remains with the mortgagor. Mortgages are executed by deed and recorded. There are both primary and secondary mortgage markets. In the primary mortgage market, loans are originated and consist of lenders such as commercial banks, savings and loan associations and mutual savings banks. Mortgages are available to foreign buyers provided the buyer has qualified for a mortgage loan from a local bank.
Closing/Escrow in Sint Maarten & Saint Martin
The real estate closing process is similar to that of the United States. A closing statement is used at the time of closing, which is a detailed cash accounting of a real estate transaction showing all cash received, all charges and credits made and all cash paid out in the transaction. An escrow account is set up by the mortgage company to pay for taxes and insurance. Settlement typically takes 45 – 60 days.