You may have read my previous article "Time to Buy Property in St Lucia" and decided to purchase your first villa or plot of land in the paradise island of St Lucia. This article will provide you with the knowledge to make the actual buying process as streamlined as possible.
Once you have identified your ideal property in St Lucia and had your offer accepted the first thing you need to do is appoint a lawyer, practising on the island, to handle the legal aspects of your purchase. Your Real Estate Agent may be able to recommend a lawyer however also seek the recommendations of others before making this important decision. The legal fees for a property purchase transaction will usually range from 3% to 5% of the purchase price but it is always worth negotiating this fee. Many lawyers may request 50% of their total fee at the start of the transaction. In addition stamp duty on property is 2% of the total purchase price.
Once appointed the first thing your lawyer should do is to review the Sales & Purchase agreement which you, the purchaser, will be required to sign to kick off the purchase. The agreement will cover the terms and main conditions of the sale i.e. description of the property or land, price, deposit and closing date for the sale. The deposit specified will usually be 10% of the total purchase price. Furthermore the agreement will contain a number of conditions that must be met prior to the transaction being completed, such as the granting of an Alien Landholding License (ALL) to you the purchaser (more about the ALL below.) If in the very unusual situation you were not granted a license then the agreement should clearly specify that your deposit will be returned to you.
An Alien Land Holding License is required by all non - St Lucian citizens to legally purchase property or land on the island. This license is granted for a specific property or plot of land and does not require renewal. The total fees required in applying for and being issued a license is $6,500 ECD. The overall application process can take between two and three months. Your lawyer will explain the whole application process to you and help you complete some of the more generic parts of the application forms. Before submitting the application your lawyer will also request the following list of items to accompany the submission of the ALL application form:
One full set of finger prints
Police Certificate / Record of good character from your usual country of residence
Four (4) passport sized photos (coloured)
Bankers' Reference
Personal Reference
Certified copy of passport (coloured)
Fingerprinting and the police record are historically the most difficult to obtain in a timely manner and are the first things that should be applied for on return to your usual country of residence. If time permits it would normally be easier to obtain the finger prints in St Lucia before your departure.
Once the ALL has been approved and the official confirmation received your lawyer will request the balance of the purchase funds. Your lawyer will then arrange for the property to be registered in your name at the Land Registry Department. It is only following this registration that the deed of sale can be finalised by your lawyer, signed by you the purchaser and the process brought to a close.
The end to end process, from the time you sign the initial Sales and Purchase agreement, to the signing of the deed of sale could take up to four months. The longest element will be Alien Landholding License application process.
Finally it is worth discussing with your lawyer the merits of forming an Alien Company to purchase your property. By forming an alien company you could reduce your future potential tax liability on any resale. For example if you purchase the property as an individual you would be required to pay a vendor's tax of 10% as a non St Lucian national. On the other hand, if you form an alien company to buy the property you only attract a vendor's tax of %. There will however be an additional alien company set-up fee of about $3,500 ECD.
The author, John Quail, together with his wife Ann Maria, is the owner of Horizon Property Management & Investment in St.Lucia, which has been established to assist purchasers, existing homeowners and developers to maximise the potential from property within St. Lucia. Further information about property in St. Lucia can be obtained at http://www.horizon-pmi.com/
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