St Barts (officially the territorial collectivity of Saint-Barthelemy) is an overseas collectivity of France which is located in the West Indies. This is an area of the world which has long been associated with high net worth individuals and expensive properties. The island of St Barts is a regular destination for the world’s rich and famous whether acquiring property on the island or holidaying. While the island does have a privileged tax status this often overshadows the buoyant and liquid real estate market on St Barts.
As we touched on above, St Bart is actually an overseas collectivity of France and therefore many French lenders are active in the region. This is especially useful for European based clients who may already have a relationship with a French or International bank. Like other islands in the region, the government of St Barts is extremely encouraging of overseas investment especially when it comes to real estate. As a consequence, non-residents should have no legal issues when looking to acquire property on St Barts.
There are very few restrictions for any nationalities looking to borrow against real estate on St Barts which is encouraging for many of our high net worth clients. That said, many French nationals will receive favourable finance terms if looking to acquire property in the area due to the close relationship. This adds to the value of long-term residency on St Barts and the fact that many foreign real estate investors do eventually go down this route.
Traditional French banks and private banks tend to be the most common providers of finance when looking to acquire property on St Barts. While both capital repayment and interest only mortgages are available, interest only mortgages tend to be more accessible for liquid clients. Many private banks offering mortgages for St Barts property will also require the initiation of a new private banking relationship and the placing of assets under management.
As we touched on above, St Barts does enjoy a privileged tax status which tends to attract high net worth individuals. Those who have been resident on the island for more than five years will be exempt from income tax. They will also be exempt from VAT, wealth tax (on real estate held on the island) and any other type of taxation. Interestingly, for those looking to plan ahead, there is no inheritance tax liability for property held on St Barts.
The fact that just over 12 months after a 2016 hurricane decimated parts of St Barts, property was changing hands for $67 million says everything about demand. The lifestyle, real estate market, investment opportunities, climate and the very favourable taxation environment have made St Barts an extremely popular destination for high net worth individuals. Finance is readily available through French lenders as well as international mortgage finance companies offering further support to the market.
Here at Enness we have built up a wide range of very strong relationships with international mortgage providers. Our dealings in the domestic French property market have also opened up opportunities for customers looking towards St Barts and its strong French connection. There is also the private banking route which can be more accommodating for complicated financial structures.
We have managed to structure an array of mortgage deals for property on St Barts, where others have floundered, taking into account worldwide income and worldwide assets. Maximising recognition of worldwide income and assets amongst mortgage providers can be challenging. However, our independent status means that we can talk to any lenders in the market and create bespoke mortgage finance structured around your particular scenario. This maximises mortgage finance while minimising your long term financial liabilities.
Why not give us a call today for a no obligation chat and we can discuss your situation in more detail and potential solutions.