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Stamp duty: A comparison between New York City and Saint Barth

It is interesting to compare the Stamp Duty (Droit d’enregistrement“) applicable to real estate transfers in New York City with the one applicable in Saint Barth.

 

The new New York City stamp duty schedule, effective July 1st, 2019, will be as follows:

● $1 million to $1,999,999: 1.00% (same as previously)

● $2 million to $2,999,999: 1.25%

$3 million to $4,999,999: 1.50%

$5 million to $9,999,999: 2.25%

$10 million to $14,999,999: 3.25%

$15 million to $19,999,999: 3.50%

$20 million to $24,999,999: 3.75%

$25 million or more: 3.90%

 

The Stamp Duty applicable to real estate transactions in Saint Barth amounts to 5% of the price of the transaction. In addition, the buyer has to pay the “notaire’s” fee (a fee to the agent appointed by the state to handle the land registry), which amounts to about 0.9%, and the land registry fee, which amounts to about 0.10%.

In total, the mandatory costs of a real estate transaction are about 6% of the price of the transaction in Saint Barth.

So, let’s keep in mind that it costs twice as much to close a real estate transfer in Saint Barth than it does in New York City.

Lastly, it is, of course, crucial to be assisted by a local law firm in order to negotiate and to secure the transaction. Attorneys’ fees are usually very reasonable, compared to brokers’ fees and to the above mandatory costs, and can help you save a lot of money on your transaction.

Why rely on us for real estate transactions?

We are legal experts in real estate.

As legal professionals, we are knowledgeable in the complex legal, financial and technical aspects of real estate. Therefore, we can anticipate potential difficulties, protect you from all risks and secure all stages of the transaction, while complying with the legal and regulatory framework for a successful completion of the transaction. EJA is committed to giving you the best legal solutions to any situation you might experience and providing you with services tailored to your needs, with responsiveness and efficiency. Our clients value our innovative approach and a high degree of individualized attention.

EJA strives to apply its global knowledge to your needs and not only advise you on the specificity of the transaction but on all related matters, such as negotiation, urban planning, tax, joint ownership, succession, corporate structuring and construction issues.

EJA always has a strategy in mind in order to bring you the best in all circumstances: best price, best conditions, and best timing.

 

We always act only in your best interests. 

Especially in Saint Barth, which is a small world, people who are not lawyers pretend to give advice on legal matters, especially when it concerns real estate transactions.

Contrary to the public notaries — who must comply with the obligation of impartiality as being agents appointed by the state — we, as your lawyers, can act as your advocates at all stages of the transactions, especially during negotiations, with only your best interests in mind. We put our clients first and we are always responsive to your needs, priorities, and pressures. We understand your perspective and show that we think and care about your concerns as much as you do. EJA’s goals are to deliver superior service, put your interests ahead of ours, earn your trust and build our relationships.

Furthermore, public notaries are limited in giving legal advice. They can only do so as it relates to their position and should only focus on the good application of the law. Hence, public notaries cannot have your best interests at heart because they must take into account other conflicts of interest. So, when they pretend to give you legal advice on real estate transactions, they are very likely to be involved in a conflict of interest.

We also clearly differ from real estate agents, as we are regulated by a strict deontological code and are bound by a duty of competence and advice (“obligation de conseil”). As your legal advisor and confidant, we make confidentiality a keystone to our attorney-client relationship. Furthermore, our professional civil liability for the advice given and for the documents issued lead to extreme vigilance. Real estate agents, on the other hand, are traders whose objective is to complete the transaction, regardless of the risks for the buyer and/or the seller, for which they are never responsible, given the fact they are paid in commissions.

Lastly, if you run a business, local accountants pretend to be allowed to practice law. By law, they are not supposed to do so, apart from advice derived from the completion of your annual financial statements. In fact, they are not as knowledgeable as lawyers to advise you on your corporate, tax and dispute issues; the negotiation of your leases; the hiring of personnel; and the management of your brands.

 

We resolve business disputes in and out of court.

Unlike the public notaries and real estate agents who cannot represent you before the courts, we, as lawyers, can do so in case a dispute arises during or after the transaction. EJA has strong litigation experience and will be able to help you make well-informed decisions from the onset of a dispute to a successful resolution. We inform you of your rights and your obligations and advise you on pitfalls to be avoided, especially in complex structures of real estate projects. We regularly assist our clients with injunctions, specific performances and the appointment of experts in order to preserve your rights and any evidence in any and all circumstances.

 

We assist you after the transaction.

EJA strives to create a strong and lasting relationship. We are at your disposal to assist you with any matters post-completion with respect to any of your transactions.

Investing in Saint Barth to Make Your Dream Come True? This Is What You Have to Know

Saint Barth, also called Saint Bart’s (“Saint-Barthélemy” in French) is an island of small dimensions, but it has already proved promising when it comes to real estate investments and development.

In fact, it is probably the sole Caribbean island that witnessed an uninterrupted expansion in the real estate segment, even during the recent economic recession. Moreover, in the last several years, the real estate transactions on the island began to manifest a noticeable increase in frequency, with a number of roughly twenty to thirty operations taking place annually.

The attractiveness of the local market of immovable assets is confirmed by the multiple public figures who have already entered it, and the fact that the prices always followed a positive trend, reaching the peak of the global real estate luxury market.

Against this background, for those convinced by the potential of this destination, wishing to acquire real estate property in Saint Barth, there are some particulars to be taken into account.

One of the most important aspects is probably that the island is almost tax-free, thanks to it lacking debt. Except for their consumption of utilities (water, electricity, and gas), there is no income tax paid by the 10,000 residents. Here, the main tax resources of the Island are the registration tax applicable to the sale of properties (4.80 %) and of businesses (1.40%), the real estate capital gain tax (20%), the touristic tax of 5%, imputable on the profits gained from the rental of the immovable, and the custom duties of 5%, applicable on all imported goods.

In what regards the sale and purchase transaction itself, these operations are usually conducted with cash, using the local currency (the Euro) to fix the price but also the U.S. Dollar, provided the parties mutually decide so. Given the important size of these deals, mortgages are rather difficult to obtain and also non-practicable, due to the liquidity of the market.

As far as the formal procedure is concerned, the transfer of a property takes place using the services of a notary (“notaire“), who is essentially an officer appointed by the French government to handle the land registry. It has to be mentioned that the transfer taxes, land registry fees and notary’s fees entitled by the sale will normally amount to about 6% of the total price, and are usually borne by the buyer.

Finally, notwithstanding the illusory triviality of this kind of transactions, generally alleged by the brokers, the acquisition of an immovable asset on the luxurious island requires particular prudence and great care, especially in what regards the structure of your investment.

It is highly recommended to resort to the specialized assistance of an experienced attorney, who will advise you on essential matters such as the optimal venue of the real estate, depending on the purpose of your acquisition, your financial expectations and life-style.

Some potential stringent issues that need to be assessed are, for instance, if despite the marvelous view from the property, the adjoining lot could be developed into blocking it, or establishing whether a land can be classified as “green zone” meaning that any construction is prohibited there, or if the surface area that you can build can be insufficient for the villa of your dreams, easements can affect your property’s worth, etc.

A qualified attorney will also help you with the estate planning and any tax planning issues, and will analyze and manage, to the best of your interest, the characteristic implications and prospective risks of the procedure, as well as matters concerning financial planning and future management of this wealth.

Emmanuel Jacques Almosnino is a highly reputed law firm, both locally and internationally, with a broad, well-established portfolio in this field. The firm will negotiate the deal on your behalf, secure your transaction in the most optimal conditions, and provide a full, “turn-key” service, in order to ensure that, the otherwise complex, process of acquisition is as simple and smooth as possible.

Having worked with VIPs for over 20 years in offering support in real estate transactions in Saint Barth and internationally, EJA’s solid expertise combines financing, structuring, and acquisitions. These credentials enable the firm to provide top quality legal services for your future property purchase on the island of Saint Barth.



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