Real estate in St.Martin

St. Maarten/St. Martin is the smallest island in the world to be divided between two different nations. The island is split between the Dutch and French, and the Island's two sides offer you the culture and lifestyle of both the Dutch and the French.

The French side/the island of Saint Martin is home to several world-class accommodations, including world-renowned hotels, luxurious villas, and time share properties. Some properties have over 200 rooms, while others have fewer than twenty. Many are located directly on beaches and in upscale shopping districts. Villas pepper the coast, boasting exclusive beaches. Some are private residences, while others are available to affluent renters. The island's most exclusive neighborhoods with grand estate homes are on the French side, the Basse Terre or Lowland region being the most notable one.

French St. Martin Real Estate Laws, Taxes
On French St.Martin, real estate transactions are always handled by the Notaire (Notary). The Notaire is responsible for preparing the final deed and obtaining all relevant searches about the property. The Notaire must check that each party has full capacity or the right either to sell or purchase property.

Like on the Dutch side of St. Maarten, the Notaire is responsible, by law, to both parties and is obligated to do a proper title search to insure a clear title transfer. A personal attorney is not necessary.

• Land lease and fee simple deeds are available.
• Approximately 10% transfer fees; includes Notary and taxes.
• Land tax is applicable.
• 33 1/2% capital gains tax.
• Offshore companies are welcome but with restrictions.
• Land speculation is limited. Build within six (6) months or additional taxes apply.
• Building permits and zoning require some local knowledge.

Purchasing procedure -property on the French side of St. Martin
French St Martin covers the northern two thirds of the island. Governed from the much larger island of Guadeloupe, St Martin is a fully European territory and follows the same standards and laws as continental France.

For non-French and non-EU buyers there are further processes, principally applying for permission and clearance to reside in France.  This process normally takes about three months but can run concurrently with the purchasing procedures. It includes full background, economic and citizenship checks, registration with the Government, health checks and proof of income if you are planning to live and retire to French territory.

An agreement is negotiated between buyer and seller, and the initial contract which is called a Sous-seing Privé, is drawn up by a French Estate Agent, or a Compromise de Vente, if prepared by the Notaire, and is signed by both parties. This is a legal document, binding on both parties. At this stage the buyer pays a deposit of a minimum of 10% of the purchase price which is retained in a special account, like an escrow account, by the Notaires office until completion takes place or the sale falls through.  Additionally at this stage the property is taken off the market.

It is possible to form contracts such as the Promesse de Vente which is not binding on both parties to the same extent as the Compromise. By signing it the vendors still commit themselves to selling the property to the purchasers, but this commitment takes the form of promising not to sell it to anyone else within a stated period, usually 3 months. A deposit of between 5% and 10% is again paid and again the purchaser will usually forfeit the deposit if they do not go ahead.

Before signing the Compromis, it is worth having any inspections that you require done, as once this agreement has been reached, it is binding on both parties. Once the Compromis or Sous-Seing Privé has been signed there follows a period of generally 6 - 8 weeks in which the searches are carried out to ensure that the property is not subject to any imminent environmental changes and during which time the purchaser will be required to assure the financing of the purchase.

These searches and the other contractual matters are carried out by the Notaire. The Notaire is unlike most European/North American Solicitors/Lawyers, as he is not appointed to act for either party in the transaction but as a public official whose duty is to represent the French Government. His/her function is to ensure that the transaction is carried out legally and accurately and in accordance with due process and to give the transaction absolute validity that cannot be contested. It is, therefore, unnecessary to appoint a second Notaire to act for the buyer, although many non-French buyers like to have a local Lawyer explain some of the procedures that arise which may be unclear to the uninitiated.

At the same time, advice should be sought in order to understand fully the complexities of French succession law which does not allow you to leave your share of the property to which you wish - even if you have an existing Will.  It is possible to work around these laws, but this needs to be completed before the final signing.

If a mortgage is to be raised, then it is necessary for this to be declared at the time of the agreement and a clause is added to the Compromis which protects the purchaser's interests in the event that a loan is not made available. If the mortgage is not granted and the sale does not proceed, the deposit is returned. In the event of the discovery of something not revealed by the seller through the searches, the buyer can withdraw and the deposit is returned. Should, however, the buyer break the contract for any other reason, the deposit is paid to the vendor.  Should the vendor break the contract, the deposit is returned to the purchaser.

At the end of the initial period which can be extended by the agreement of both parties, the Acte de Vente is signed at the Notaire's office and the property passes to the buyer.

Advantage of the French side is a rock solid legal system, absence of obvious corruption in the administration, the financial resources of France. Property in St Martin appears to be more of a solid asset of ones financial portfolio. There are also distinct advantages of becoming a resident of France, including health insurance and other benefits.

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