Real Estate Laws In St Maarten

st maarten real estate law

Property Acquisistion Laws In Sint Maarten

St Maarten Real Estate Law

Simple yet effective!
With a smaller economy, the volume of real estate transactions; means everything is simpler and less complicated.

Real estate laws in St. Maarten are somehow unique from the rest of the world but not unique in the Caribbean. There are many different aspects of real estate laws in St Maarten that need to be discussed in full and in-depth.

In this article, let us discuss the different real estate laws in St. Maarten and the rules that one should follow when it comes to the acquisition and transfer of real estate property.

Why is St. Maarten Considered As A Pandemic-Proof Island?

One thing that a lot of people have learned in the past year is the fact that being in the center of everything is not always a good thing.

What happened to New York will less likely happen to a place like the Bahamas or St. Maarten. The problems associated with big countries and places like London, Italy, and the United States will less likely happen in a place in the sea. This is what makes St. Maarten a property paradise that is as safe as one could get against the pandemic.

Second-home investors, property investors, and even tourists have made St. Maarten their home away from home. What makes St. Maarten a good real property investment is not just what the islands represent but the real estate laws in St. Maarten that are friendly not just to locals but to foreigners as well.

St Maarten Real Estate Laws

The Paradise Acquisition

St. Maarten is known for many of the things that it has to offer. Before the pandemic, St. Maarten has been considered a paradise that is primarily used for vacation and some investment. Today, families have revisited St. Maarten and discovered that it is much more than just a place for a vacation.

The good food, the friendly locals, and the real estate laws in St. Maarten are asking every single visitor to stay.

There are many reasons why real estate in St. Maarten is sought after. For those who are already sure that they want to purchase a property in St. Maarten, they can do so with the knowledge that real estate laws in St. Maarten are pretty straightforward when it comes to what they want the population to follow.

Private Property Ownership

Private property ownership in St. Maarten is often called eigendom. It means property ownership in dutch. Any legal entity and the private individual may own real estate property in St. Maarten.

As in any other place, the legal owner of the real estate property in St. Maarten has the absolute right to that property. An absolute right includes the right to freely use and enjoy the property. The absolute right also includes the right to dispose of a particular property that the owner has possession or legal ownership of.

However, the individual who wants to fully enjoy his rights as an owner may only do so by also observing all of the encumbrances and all of the other limitations set forth for the property.

Can I own real estate with others?

Yes, real estate in St. Maarten can be jointly owned. Joint ownership of the real estate in St. Maarten may occur when two or more private individuals or legal entities jointly purchase the real estate property.

In St. Maarten, the joint ownership common regulations or the beheersregeling may be created or put in place to provide for the rules that will govern the individuals.

Where is my real estate ownership recorded?

If you decide to purchase property in St. Maarten, the ownership of the real estate shall refer to and must be recorded in the public register for real estate property. The land registry in St. Maarten is called a Kadaster. It often provides an overview of the liens, mortgages, encumbrances, and all details related to land ownership in St. Maarten.

If you purchase property, the civil law notary who executes the transfer deed will have to register the new ownership in the public register for real estate property. This is primarily done to complete the transfer of ownership of property in St. Maarten. After which, the buyer is now considered as a property owner in St. Maarten.

Long Term Land Lease

For property that does not yet fully refer to one main ownership or that where ownership pertains to the government, there is a long-term land lease that is granted. A long-term land lease refers to the right of an individual to hold and use someone else’s real estate property for a fixed period. Some long-term land leases may be unlimited but this is a practice that is no longer done today.

An individual who owns the property under a long-term land lease is allowed to use the real estate property as if he was the owner of the property. There will only be a couple of limitations in the deed of a long lease.

As part of the government’s way to earn money, the real estate acquisition of individuals in St Maarten Real Estate Law, or of foreigners, through a long-term lease is required to pay a canon or an annual payment.

Is there a difference between a long-term lease and a normal lease?

Yes, there is a difference between a long-term lease in St. Maarten and a normal lease in St. Maarten. Generally, a long lease is constituted to last for a long period. The usual term of a long lease in St. Maarten is in decades.

On the other hand, for a normal lease, the long lease is a proprietary right. The right can be mortgaged as security and is just like any other normal lease.

Who grants the long-term lease in St. Maarten?

Long term lease in St Maarten Real Estate Law is granted by the government for several reasons.

First, when the government intends to regulate the use of land and prevent unlawful land use, they grant a long-term lease. This act from the government in St. Maarten aims to at least encourage those who are building houses to help those who cannot easily afford to buy land.

Another reason is that the government wants to designate persons who can take care of the real estate in St. Maarten and in turn helped the island boom further in economy and tourism.

The government’s income is also reliant on the real estate in St. Maarten. The lack of real estate tax on the Dutch side requires the government to be more crafty in creating laws that would enhance government revenue.

The long-term lease granted by the government increases the value of the land. As land value increases because of improvements placed, there are bigger and better benefits for the general interest.

Can I dispose of my long-term lease and transfer rights to others?

A long-term lease is usually granted by the government. Hence, it is still the government in St. Maarten that is the ultimate owner of the property. However, with a long lease, the lessee can use the real estate in St. Maarten and dispose of it, as if he is the ultimate owner.

There are, however, limitations as to the kind of disposition that the individual lessee can make. Applicable restrictions have been placed by the government on this end and it often depends on the right of the long-term lease agreement.

Can I terminate my long-term land lease?

Yes, you may terminate your long-term land lease. St Maarten Real Estate Law allows the lessee to terminate the long-term land lease. The lessor may also do so if the lessee fails to pay the annual payment for two consecutive years or with another severe breach of contractual obligations. The right to terminate depends on the deed of the lease.

What are the effects if I terminate my long-term land lease?

Real estate laws in St. Maarten require that if the long lease is terminated, for reason attributed to the lessor, the owner of the real estate may pay the lessee compensation for the buildings and improvements.

However, if the termination of the long-term lease is because the lessors failed to pay his annual obligations or have a breach of his contractual obligation, such responsibility may no longer be required of the lessor.

Short Term Land Lease

In the case of a short-term land lease, the land that is usually owned by the government may also be leased out for a short period. Real estate laws in St. Maarten define a short-term lease as that between one and five years. The lease may be granted for recreational or agricultural purposes.

In comparison to a long-term lease, a short-term land lease in St. Maarten is very restricted and the lessor would have more power to easily terminate the lease.

St Maarten Real Estate

Acquisition of real estate in St. Maarten

The acquisition of real estate in St. Maarten is a strict process. While foreign ownership of land is allowed. The sale and purchase of real estate property in St. Maarten is also a strict legal process that undergoes specific local real estate laws in St. Maarten and the rules on money laundering. St. Maarten is a member of the Caribbean Financial Action Task Force on Money Laundering (CFATF) to protect the islands from the acquisition of questionable individuals tagged under the rules of anti-money laundering and terrorism financing.

Two main documentary requirements are processed in the acquisition of real estate in St. Maarten. The acquisition of real estate requires a purchase contract and a notarial transfer deed. There is a title investigation that should also be conducted before the civil law notary.

Title Investigation

The requirement of a title investigation conducted before the civil law notary has a specific purpose. The purpose of the search is to verify the details of the real estate property in St. Maarten.

Details such as the name of the real estate owner are important. The search verifies the ownership of the real estate in St. Maarten. Who has the power to dispose of the property? Is the property encumbered with a mortgage or attachments? These are important details related to the ownership.

Once all of the other details are settled, the transfer then needs to be registered in the public register for real estate property in St. Maarten. It must be concluded in writing and executed before a civil law notary.

The conditions for the acquisition and transfer of real estate property in St. Maarten are stringent. When the deed of the transfer has not been executed before a civil law notary, the agreement may be voided and nullified by the parties.

Requirement for Natural Persons

In real estate law in St. Maarten, or just about anywhere else, there are two kinds of legal personalities – the natural persons and the juridical persons. Natural persons are individuals. Juridical persons are corporations, entities, organizations that are given existence by the application of the law.

If the buyer of the real estate is a natural person, there are a few requirements. When agreeing, the buyer must be given a copy of the written agreement. He is given a reflection period of three days after the deed or its copy has been handed over to the buyer. The reflection period is given as the right of the buyer to rescind the sale agreement.

If the buyer exercises his right to rescind buying the property, the right of rescission will not arise again if the same parties enter into a new sale agreement for the same real estate property.

Documentary Requirements For The Sale Of Real Estate In St. Maarten

To aid buyers and sellers, the requirements for the sale of real estate in St. Maarten are listed and categorized in this section.

Required Documents

The transfer and purchase of real estate property in St. Maarten require the following documents:

  • A sign purchase agreement between the buyer and the seller of the property. This is an important document. Verbal agreements can be revoked at any moment. If you are planning to get a property in St. Maarten, you should make sure that you get a sale and purchase agreement in written form;
  • An appraisal report must indicate the description of the immovable property. It must mention the certificate of measurement. There must also be an appraisal of the market value that is not older than six months from the time of the transaction;
  • A copy of the title deed must also be included in the documentary requirements; and
  • The documents and information from the buyer and seller.

Compliance With Anti-Money Laundering Rules

The Anti-Money Laundering (AML) legislation for St. Maarten may be found in the National Ordinance Combating Money Laundering and the Financing of Terrorism. The rules require that the real estate agent in St. Maarten inquired into the identity of the customer and must know who is the ultimate beneficial owner of the property.

After the real estate agent in St. Maarten has entered into a business relationship, he must continue applying the rules and report any unusual transitions. He must take a risk-based approach to identify the needs and the service that he is required to submit. He must also keep his records for years after the termination of the relationship.

What does the Risk-Based Approach Mean?

A risk-based approach means that the service provider, in this case, the real estate agent in St. Maarten, creates and continues his service relationship with a customer even after the transaction has ended.

The real estate agent should apply the risk-based approach and also conduct a risk assessment that is formalized in a Customer Due Diligence (CDD). Depending on the risk, there are three different kinds of forms – the simplified, the standard, and the enhanced form.

Buying Real Estate As A Foreigner In St. Maarten

Buying real estate property as a foreigner in St. Maarten is not impossible. While many countries do not allow foreign ownership, this is allowed in St. Maarten and possible. Foreign ownership is not impossible in St. Maarten. However, rules and regulations are in place to protect the islands from being used for money laundering and terrorism financing. The process is the same as any other purchase of property on the island.

The foreign buyer would start his property search. Once he has found the perfect property, he would make an offer. On both sides of the island, there are different ways that they can get the property.

There is no need for a lawyer because a civil law notary, who is responsible for performing the title search, would give the all-clear before any other part of the transaction is commenced. The foreign buyer, whether personal or corporate, is then required to pay the notary fee. The notary will prepare the required documents and handle the buying and selling, effectively representing both the buyer and the seller.

The transactions are normally completed within a timeframe of 4 to 6 weeks. The buyer covers all of the transfer charges.

Even foreign buyers have a right to the cooling-off period where they may rescind the contract within three days from receipt of the sale and purchase agreement. Of course, this right also comes with specific limitations.

Paying For Your Real Estate Purchase in St. Maarten

Paying for your real estate purchase in St. Maarten is just as important as all of the legalities that you have to undergo to legally obtain the real estate property in St. Maarten. How do you pay for your real property in St. Maarten? There are two ways: a certified banker’s check payable to the order of the office of the notary and a wire transfer in United States dollars are two of the more important ways that you can pay for your purchase of the real estate in St. Maarten.

A bank account can be opened at the local banks and you may set them up either as a corporate resident or a personal account. The properties are then transferred following the European systems.

Other than your purchase price of the property in St. Maarten, you should also expect to pay a one-time government transfer tax of 4% in addition to the Notary’s fee. The total closing cost of the property and the transfer tax may be between 4% to 6% of the purchase price.

Since you should not expect to have any closing costs on any of the movable items or furniture, you may deduct the value of such items from the gross price. The value determines to be for the understanding of both the buyer and the seller and must be agreed upon beforehand.
What if I want to purchase property to be turned in a leased property?
If the purchase of the property that you have is to be turned into a real estate investment, you are recommended to have it named after an offshore company for more tax breaks. The notaries and trust companies in the Caribbean islands can provide you with the necessary information related to this need.

However, regardless of whether the property you have falls under any of the above categories, you should take note of the zoning requirements of the property.

Zoning requirements are different for residential use and somewhat commercial use. Ask your civil notary to look at the property and include the zoning rules in St Maarten Real Estate Law as part of the search. Tell them the specific purpose of your investment.

Buy Real Estate In St. Maarten Today

If there is one thing that the pandemic has taught all of us, it is the fact that life is short. If you have always dreamt of having property in the Caribbean, St. Maarten real estate is a good place to search.

While searching for the perfect place, keep in mind that real estate in St. Maarten is as advanced as in any other island in the Caribbean. There are condos in St. Maarten, hotels for sale in St. Maarten, and land for sale in St. Maarten that you can choose from. A destination that is as good as a permanent abode, St. Maarten is truly the best place to invest during, and even after, the pandemic.

St Maarten Beach Real Estate

Americans Rush To St Maarten Now

Buying Property St Maarten

Americans Buy St Maarten Real Estate

A handsome tanned couple, confident and distinctively urban American background; both tall as our chandeliers; arrived from San Juan straight to our offices looking for a St Maarten property to buy for investment. As conversations go by, I find out that both are originally from New York, moved to Puerto Rico two years ago and now looking to settle in ‘vibrant’ St Maarten! they have been in the lookout for a investment condo ever since the pandemic started. All their research from all the various Caribbean islands, led them to St Maarten!

  • Its all came down to a safer investment compared to other islands. St Maarten’s economy has remained stable for a decade!
  • Loyal over-night tourism leads to great return on property investment via AirBnB.
  • Confirmed by every study that St Maarten and Barbados will see the highest growth in Caribbean real estate. Your property will increase by 30% in value over 5 years!
  • Many financial benefits specific to Americans and Canadians.

June 2021: Right now Americans are rushing to buy property in St Maarten because the laws and prices are favorable to American buyers. With a shortage of real estate in the USA, the Caribbean appears to offer a haven for investors. USA Treaty makes it easier for Americans to buy property without the residency hassle. See Treaty information below.

Why Americans Buy Property In St Maarten

It doesn’t come as a surprise as more Americans are setting their sights on purchasing properties in St. Maarten, the southern Dutch region of St. Martin. Whether it’s about acquiring property that you plan on renting out to tourists, or an offshore company looking to invest in the island, now is the best time than any to do so.

Buying St Maarten Property as an Offshore Company

There has been a huge rush in the number of Americans purchasing properties in St Maarten lately, and many are attributing this trend to tax evasion, which is clearly not the case. One only has to dig a little deeper to find out exactly why Americans are setting up shop in the southern Dutch region of St Martin.

Tax-neutrality

Americans who invest offshore, particularly in St Maarten, build their assets as an LLC company as this type of business is tax neutral in the US and profits are taxable only when in the possession of the owners. This does away with the complex and expensive reporting required from international business companies, which are tax neutral as well.

With the explosion of the internet and global commerce, a level playing field has been created where small countries such as St Maarten can compete head-on with first-world governments. As an offshore company in the Dutch Caribbean, you can hand-pick legal and financial systems that will play to your interests, something governments and financial conglomerates had a traditional monopoly on.

Offshore companies operating in St Maarten are not required to pay applicable taxes on income, profits, capital, and duties. Also, St Maarten properties in the form and value of shares are transferable to another company or a member of the offshore company without incurring transfer fees.

Less regulation, lower costs

Offshore companies buying properties in St Maarten enjoy a comfortable level of freedom and flexibility as they operate in a space with less regulation, particularly for business-savvy entrepreneurs capable of managing their financial risks, and who believe in the true concept of a free market and an open economy.

Going offshore makes it possible for your company to save a considerable amount of time and money in legal and compliance costs. And since there won’t be a need to deal with endless bureaucratic red tape, you’ll be able to allocate more time growing your business, or perhaps enjoying the islands even more. Remember, straightforward, offshore deals are normally completed in a day or two. In a business environment mired with all sorts of regulations, you will spend weeks or maybe even months, and thousands in legal fees to do the same.

Asset protection

A company’s assets that are legally brought offshore (all declared to concerned agencies, that is) are protected from all manner of lawsuits, particularly those with scant legal merits and fraudulent plaintiffs with dubious claims. This is due to the fact that it will be difficult for the plaintiff’s lawyers to determine, let alone identify assets held offshore, thus shielding the offshore company from such lawsuits.

Even if the plaintiff’s lawyers were able to identify the offshore assets, they will need to spend anywhere from $50, 000 to $100,000 (as a fidelity bond) to cover legal fees as they need to go a foreign court to enforce any decision they may get.

Global trade

E-commerce companies can be managed well in an offshore environment making use of offshore merchant accounts. Moreover, international trading activities, such as purchasing physical items from China and selling them in the US market, are likewise ideal for offshore operations. Offshore companies can easily acquire letters of credit from their offshore banks to facilitate business deals. Profits may roll in tax-free (until brought home, of course), and parties are able to maintain confidentiality.

Offshore bank accounts

Operating an offshore company in St. Maarten makes it possible to open an offshore bank account. Income generated by these companies (such as rentals, accommodations, sales, etc.) is allowed to be deposited into offshore bank accounts. There are a good number of international banking institutions in St. Maarten that offer securities investment brokerage and other relevant services that can help maximize the company’s growth potential through returns. Internet offshore banking makes it possible for offshore companies to monitor transactions and payments.

Another benefit of purchasing St Maarten properties through an offshore company is the ease of managing the business in various currencies as the island uses various currencies such as the US dollar, Dutch guilders, Euro, and more.

Buying St Maarten property as a private individual

More often regarded as a popular vacation spot, St. Maarten is fast becoming a place for American citizens who are either retiring or just opting out of the past-paced life to lead a less stressful life in the Caribbean. The Dutch St. Maarten is that ideal place and more.

The Dutch-American Friendship Treaty

This agreement between the two countries has made coming to St. Maarten even more enticing (as if the island not inviting enough). Based on this treaty, Americans coming to the southern part of St. Martin must be treated the same way a Dutch national not born on the island is treated. This means Americans hold the same rights to that of a non-St. Maarten-born Dutch citizen entering and living in St. Maarten. American citizens looking to live and work in St. Maarten never had it this good!

No Property Tax

If you’re planning to buy property (e.g. residential or rental) in St Maarten, you’d be glad to know that the government of St Maarten does not impose property taxes. Let’s say you start a small, home business such as a coffee shop or souvenir store, you won’t have to think about capital gains taxes, goods and services taxes, and sales or harmonized sales taxes.

Duty-free on imports and exports

If you’re planning on importing or exporting materials personal belongings to and from St Maarten, you may do so without having to worry about paying applicable taxes simply since St Maarten does not impose customs duties on such goods.

Higher standard of living

St Maarten enjoys a higher standard of living in comparison to neighboring islands in the Caribbean. The islands offer creature comforts you’ve grown accustomed to back home. There are grocery stores, malls, casinos, and bars, while products from North America and Europe are never in short supply.

Highly diverse and multicultural

St Maarten is a proverbial melting pot of various cultures from all over the world. There are about 100 different nationalities in St Maarten at any given time. So if you’re the type of person who loves diversity and meeting people from different countries, you’ll find St Maarten a true gem of an island in the Caribbean.

I have been selling condos to Americans for 25 years in St Maarten. In fact I remember my very first buyer was American. 60% of all our expats are from USA!

Come join the party in St Maarten!