St. Kitts Real Estate
Federated by Ferries - Part I

 After Sugar - New Opportunities in St. Kitts                             

In St. Kitts, some of the real estate for sale on the southern side of the island and the arid eastern end is in private hands, and though difficult to find is available to non-nationals. The rest of the real estate is government owned and almost impossible to buy in a normal life time! Governments move in inexplicably slow time dimensions and in even more mysterious marketing realms. For example, advertising half acre plots at $40,000 a piece through SKY TV in the UK only.

In Nevis, pretty much all the land is in the hands of private owners, and some of the larger homes and commercial properties are owned by expatriates from all over the world.

Two tiny countries, two proud peoples, and one unique federation makes St.Kitts & Nevis a strong player among the Eastern Caribbean countries.

Separated by a five mile strip of sea, and linked by ferries from the centre of Basseterre in St. Kitts to the centre of Charlestown in Nevis, there are many differences. Many of them to do with the rules and some of the customs governing the purchase of land and property for both non-nationals and nationals.

St. Kitts Real Estate

In this article I will concentrate on St. Kitts and look at Nevis next time. Much of the policies and decisions that the government of St. Kitts is now making over the sale of real estate is a result of 300 years of sugar planting, and all the economic, social, legal, cultural and geological effects that impact a land over a third of a millennium.

A Member of the regional OECS (Organisation of Eastern Caribbean States), and of the larger Caricom, the Federation looks towards the end of 2005 and the advent of Caricom's Single Market Economy (CSME) with real hope for the future. ( http://www.jis.gov.jm/special_sections/CARICOMNew/CSME1.html)
Growth in St.Kitts this year is expected to exceed 6%.

The 64 square miles that constitute the island of St.Kitts has abundant rivers flowing from the high rainfall that is collected on the central mountain ranges and rainforests. And its this abundance of water that kept the sugarcane fields rich and fertile.

In 1814 the sugar plant in Basseterre began to manufacture sugar. It was built to consolidate the production of sugar from the many plantations on the lower slopes of the central mountain range of St. Kitts, and close to the harbour in order to ship the sugar out on sailing ships (say that after you have had a couple of cane sugar rums....) as efficiently as possible.

Later on a railway was built that circled the island and ran through all the major plantations, collecting cane during the two harvests of the year. This railway has now been turned into a wonderfully romantic way of seeing St. Kitts, aboard a specially constructed train for viewing the countryside. ( http://www.stkittsscenicrailway.com/)

By the 1960s the sugar cane plantations were in trouble. Trade Unions, private owners, co-operatives and government finally worked out a nationalization agreement in which all private plantations were bought out over a 20 year agreement by the government owned St.Kitts Sugar Manufacturing Corporation.

These plantations included thousands of acres of sugar fields which became government property. Within the agreement owners retained 50 acres of their lands for farming. On the 31st of July 2005 the last cane was crushed and the factory closed down, sugar manufacturing ceased in St. Kitts. This briefly explains why so much land is owned and controlled by the Kittitian government.

As to what is going to happen with all of that land, if decisions have been made then they have not been communicated to the populace, which is another story told elsewhere.!

One interesting fact has emerged though recently, the hundreds of years of planting and cane sugar root systems have created an aquefer underneath Basseterre, the capital of St.Kitts. Estimations are currently very broad, but millions and millions of gallons of water have formed a huge reserve under the town, an important natural resource, and if planting is not continued a resource that is now finite.

The Marriott Hotel which uses 1.3 million gallons a day mainly on the golf course has its own RO, or reverse osmosis plant. New developments of this size will also have to provide their own resources both with power and water since the national systems were not built to cope with this level of useage.

The arid area from Frigate Bay all the way to Nags Head the most eastern point of St. Kitts was never planted. A few years ago Frigate Bay was set aside for special tourist development by the Government, and a few high profile investors courted. Some of these came through, including the Marriott Hotel which built a 1000 rooms, and a five star hotel of 300 rooms is scheduled for completion by 2007. Other smaller tourism projects have been completed, and new ones started.

At present there is only one very small ill-equipped marina in St. Kitts, but there is a new development starting which will considerably increase the appeal of stopping in St.Kitts for tourist charters out of St. Maarten/St.Martin, Antigua or Guadelope. It will definitely put St. Kitts and Nevis on the yachting map. About time too, this has been a long time coming, and there is plenty of good sailing and anchoring in St. Kitts.

Cost of St. Kitts Real Estate

Land is not cheap in St.Kitts, nor is property. We assessed a number of commercial properties in Basseterre. For example, for a cool one million US dollars you can purchase a detached building on the harbour front, opposite the only marina in St. Kitts and the Nevis ferry dock, and only a short distance from the huge cruiseship port, Port Zante built by Kuwaiti investors. Port Zante is one of the only two ports in the whole of the Caribbean where the Queen Mary 2 is able to dock, and she has visited eight proud times.

For one million dollars you can buy an awful lot of potential and a great investment, but not very much more. We looked at a small hotel. Upstairs there is a restaurant and 10 small hotel bedrooms. The current Kittitian owners are more concerned with catching up on their sleep during the hot, airless summer days in hurricane season. Hotel guests, many of them from the Nevis ferry overnighting in St.Kitts in order to catch an early morning international flight, are served breakfast, but lunch and dinner are discouraged. There are other restaurants around who can cater for those! Downstairs there is hardware shop, a tenant with a renewable lease. "We're tired", says the owner, a beautiful tall Monserratian of approximately 65 summers, married to a Kittitian who is sleeping comfortably on the balcony overlooking the noisy, evening street when we enter the room. "We have property in Nevis, we want to go live there."

In St. Kitts, beaches below the high water line are owned by the government and are public property. Above that, they can be private.

There is land for sale on the slopes of the central mountain range, and beachfront away from the madding crowd but it comes at a price. After all this country is a tiny land resource, with a concomitant value which will only increase with time.

The Financial Investment

Finding property or land is not that easy in St. Kitts, but you'll be glad to know that things do get easier once you have made your offer and the purchasing negotiations with the seller are over.

Expatriates buying real estate in St.Kitts can either go the Citizenship through Investment route for investments over $250,000 (US) or apply for an Alien LandHolders Licence. The Alien Landholders Licence is a negotiable thing and can be as much as 10% of the property, and is best dealt with using local knowledge.

But best of all...there is no personal income tax in St.Kitts.
In order to encourage investment, especially with the closing of the sugar industry, Corporate Tax Holidays are offered to potential investors and are often negotiated most successfully through local partners. Under the Fiscal Incentives Act, four types of enterprise qualify for a tax holiday, including no corporate tax for fifteen years. The length of the tax holiday depends on the amount of value added by the business to St. Kitts and Nevis.

Other incentives include:

• relief from customs duties and pier duties on items brought into the country for use in the construction, extension and equipping of a hotel of not less than 10 bedrooms, can be given.
• special tax relief benefits for a hotel proprietor who has been granted a license under the Hotel Aid Ordinance. This stipulates that the gains or profits of a hotel of more than 30 bedrooms are exempt from income tax for 10 years. If the hotel contains less than 30 bedrooms, gain or profits would be exempt from income tax for 5 years.
• companies registered with the Federation of St. Kitts and Nevis can repatriate all profits, dividends and imported capital.
• the Government of St. Kitts and Nevis and the United States has entered into an Investment Guarantee Agreement.

Land tax is charged at various rates depending on the size and nature of the land concerned, and whether they are in a Special Development Area such as Frigate Bay. A house tax is charged at the rate of 5% of the annual gross rental value for residences in St. Kitts with a 25% rebate for properties that are occupied by their owner solely as residence. St. Kitts real estate and Nevis real estate stamp duty is 12% for freehold and 5% for condominiums. Stamp duty is payable by the seller only.

Open to Offers

With the closure of the sugar industry this month, now, more than ever the government needs to focus on new investment and long term jobs for the country. Certainly one of these focus areas is massive expansion of tourism and developing the infrastructure to cope with this. New hotels, inns, villas, marinas, restaurants and all sorts of tourist based enterprises are being looked upon with great favour at present, and there are some good possibilities on the table. But introductions to local partners are the real guarantees of success, and that's true of many of the region's small countries.

The airport is relatively new, efficient and somewhat underused at the moment. The runway of 8000 feet supports direct flights from Europe and North America, and the landing path is mainly over the sea and does not effect residential areas.

For around $300,000 there are a number of 2-3 bedroomed homes with small gardens for sale in the Special Development Frigate Bay area close to the major hotels and golf courses. These are excellent investment for holiday rentals. There are also a number of new estates and gated community, managed luxury housing projects underway.

But if your dream is verdant earth for tropical gardens and self sufficiency, look towards the north west, under the cool, damp stewardship of the central mountain ranges. Somewhere in amongst acres and acres of unhusbanded sugar cane, is the Garden of Eden.