ST KITTS & NEVIS Law and Practice Contributed by: Dahlia Joseph Rowe and Daisy Joseph Andall, Joseph Rowe, Attorneys-at-Law
ernment has the power to compulsorily acquire land for a public purpose; however, the proprie - tor of the land is entitled to compensation for such acquisition. The legislation provides for the establishment of an assessment board compris - ing one nominee of the proprietor, one nominee of the government and a judge as chairperson. 2.10 Taxes Applicable to a Transaction The seller is generally required by law to pay 10% stamp duty, assessed on the value of the property being transferred, which is usually the purchase price or the value assessed by the IRD, whichever is greater. There are instances where the seller and the buyer agree to share the stamp duty payable on the transfer, but this is completely dependent on agreement between the parties. The stamp duty payable may be increased or decreased depending on the location of the property being transferred or the circumstances of the transfer, including familial relationships, the developmental zone, and whether the land is being transferred by the court or the government Housing and Land Development Agency. If a real estate agent is involved, the seller would usually also pay the real estate commission, which is typically about 5–6% of the sale price. There are also small fees payable by the pur - chaser if the property is held by a COT: • an assurance fund fee of 0.2% of value of the property; and • a registration fee of USD2.70. The purchaser is also usually responsible for all other closing costs, (eg, legal fees, surveyor’s fees).
When shares are being transferred, it is also sub - ject to stamp duty, which is a percentage of the value of the shares, as well as to a nominal reg - istration fee. If the main asset of the company is real property, the transfer of shares would attract taxes at the same rate as the transfer of real property. 2.11 Legal Restrictions on Foreign Investors In St Kitts and Nevis, a foreign investor is required by law to apply for and obtain an alien land hold - ing licence or citizenship (usually, pursuant to the CBI programme) before that investor can hold an interest in land (see 1.1 Main Sources of Law ). If the investor is a company and the shareholders are granted citizenship, the company would not require an alien land holding licence to purchaser real estate. There are no other legal restrictions on non-citizens investing in real estate. Commercial real estate is generally financed through lending institutions. There are differ - ent financing options for the acquisition of large real estate portfolios or companies holding real estate, such as lease to own arrangements or by participating in the CBI programme, where the purchasers finance the development project. If the large tract of land is owned by the gov - ernment, there is the option of the government partnering with the developer in various ways to develop the real estate. 3.2 Typical Security Created by Commercial Investors 3. Real Estate Finance 3.1 Financing Acquisitions of Commercial Real Estate The typical security created or entered into by a commercial real estate investor who is bor -
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