St Maarten / St Martin FAQs

Frequently Asked Questions about St Maarten and St Martin

Q: Can a foreigner own property in St Maarten?

A: Yes. Anyone can own property on either side of the island. Buyers are protected by both French and Dutch Law.

Q: What about title search, closings, etc.?

A: All European Notaries are of legal background. They must first be lawyers. They are representing federal laws when they transfer properties from seller to buyer. The buyer is made aware of the type of deed. The Notary also ensures free and clear title. If a mortgage is involved the Notary will register mortgage as well as the deed with Kadaster (Land Registry office). Closing costs on the Dutch side are around 5.2%. On the French side they vary from 9 to 11 %. On the Dutch side there is a one-time payment covering the government taxes and notary fees

Our real estate closings are completed in English or French within the time frame set by the purchase agreement. Closing times can range anywhere between one week and 2 months, and closing costs vary between 5 -10% of the total purchase price.

On both side of the island owners are under the obligation to pay room tax and income tax the French side has tax foncier tax dabitation and capital gain.

Q. What about Taxes on Rental Income?

A. Taxes on Rental Income

  • Rental Income  - real estate owned by an individual

The real estate is owned by an individual and is used for residential purposes only in this scenario the possession of a real estate has no fiscal implications.

The real estate is owned by an individual and is used partially for residential purposes and is partially rented out or the real estate is owned by an individual and is rented out in this scenario the fiscal implications are as follows:

Persons not residing on Sint Maarten having a domestic source of income shall be liable to pay income tax. Revenues generated from immovable properties located in St Maarten, is a domestic source of income for non resident tax payers, only 65% of the net proceeds from immovable are taxable, with the exception of interest and costs of loan and premiums life insurance related to the loan, expenses for the acquisition and improvement of the property are deductible.

Maintenance expenses and other income-generating expenses are not deductible because these expenses are accounted for in the standard deduction of 35% of the gross income.

  • Room Tax: 

Persons or companies providing residence to non-resident persons on short-term basis are subjected to Room Tax. The Room tax rate is 5% of the rental price.

  • Rental Income - real estate owned by a Company

The profit tax shall be levied on the profit tax of the companies or associations not established on Sint Maarten, from business operations to the extend an in so far as conducted by means of a permanent establishment, from immovable property situated on Sint Maarten.

The profit tax is fixed at 35.5%.

  • National Ordinance on Turnover Tax 1997:

Article 2 letter states that turnover tax is levied from entrepreneurs established outside of the levy area on the turnover generated from business operations for the delivery of goods and services rendered in St Maarten.

Based on article 8 section1, exemption from turnover tax can be granted if tax-payer has paid room tax on all income derived from rent of real estate.

As of February 2011 rental income derived from the renting of real estate to persons residing on Sint Maarten for the sole purpose of permanent living quarters are no longer subjected to turn over tax.

The turnover tax rate as of February 2011 is 5%

Q: What type of deed does the buyer receive?

A: There are three types of deeds

  • fee simple – land is owned by the seller. A notarial deed only is passed.
  • government long lease – normally 50 years
  • private lease – can also be 50 years

For leased land the buyer is protected if the lease is terminated. Then the person holding the lease has to give the buyer the full market value of the improvements to the property.

Q: What kind of tax would I pay as a property owner?

A: Transfer tax is included in the closing costs. On Dutch St Maarten there are no annual property taxes. On French St Martin there are assessed annual taxes. If you own a property that you use as short term rental property you are responsible for income and profit tax. You can deduct a lot of expenses such as maintenance, insurance, improvements, etc. There are no capital gain taxes in Sint Maarten.

Q: What about ownership in another name?

A: If there is a question from the IRS or another country’s tax system, on the Dutch side there is a non-disclosure law.It is more complicated on the French side. It is part of the European Community so those rules and regulations apply. This includes annual living taxes and real estate taxes. We recommend that foreign investors do so through a private real estate holding company, Societe Civile Immobiliere. This will make the estate secure.

Q: We would like to use the property part time or longer after retirement.

A: You can have added income as a holiday rental. High season rentals run from $1,500 to $25,000 a week, depending on the property. Low season rates are 30% lower.

Q: Tell me more about property management.

A: We, as property managers, become your owner representatives. We look after the payments of bills and all matters pertaining to the maintenance of your property. Because of our years of experience, we have a vast network of service agencies at our disposal to ensure that your investment is adequately protected. We tailor our management program according to your specific needs.

Q: What is the investment climate like in St Maarten?

A: St. Maarten’s Government is friendly and helpful for anyone wanting to invest and be active in Industry and the Tourism Sector. For more information inquire at St Maarten Real Estate or directly with the Commerce Department of St. Maarten.

Q. Capital Gains

Capital gains from the sale of real property are not taxable in St Maarten