History
St. Lucia’s early history is sketchy, as to whether the island was discovered by Columbus in 1503, or by his map maker Juan de la Cosa in 1499. The French eventually settled the island in 1650, but were constantly challenged by the British with St. Lucia changing flags 14 times before the British finally triumphed in 1803. • The French influence is very evident in the culture, the language spoken (Patois, a Creole-like dialect) and local cooking which still has French derivations. The Island became an independent state within the British Commonwealth of Nations in 1979.

Climate
St. Lucia is very warm all year round with very little variation in temperature. It is one of the Windward Islands, so there is always a cooling, temperate breeze. The dry season is from January to April and September to December. The rainy season is from May to August.

Why Invest in St. Lucia?
The Caribbean is a fast expanding investment market. St. Lucia benefits from this and from a stable government and economy together with booming tourism. • St. Lucia is already making a name for itself as a new property investment hotspot. St. Lucia boasts the highest quality property in 5-star luxury locations for a fraction of the price of property on neighbouring Islands offering similar Caribbean beauty. In fact, you have many of the same advantages of Barbados but the property prices in St. Lucia are currently 35%-40% lower than Barbados. This gap is likely to narrow in the next few years.

Rental market
Rental income is of great interest to investors as good rental yields are achievable from property in the new luxury resorts currently under construction. It is expected that mortgage payments and bills can be covered for the year from the rental income achieved from peak season months alone (November to May) although the season is expanding rapidly and now includes July and August. With the current statistic of 85% rental occupancy during high season and the number of tourists growing faster than the available accommodation, this figure is expected to create an even higher demand for property. With this will be an increase in rental prices. • The government is encouraging luxury developments in the major resort areas which international property investors will seek to purchase at low prices and then use their investment to supply the ever growing demand for accommodation which in turn will generate solid rental yields for the investor.

Economy
Historically, St. Lucia’s economy was based on export of bananas to Europe. When the European Union phased out the preferential access of former colonies to the EU market, St. Lucia’s government promoted diversified agricultural production, tourism and off-shore financial services. The economy grew an average of 1.3% p.a. from 2000 to 2005 and growth in 2006 stood at 5.4%, primarily led by robust activity in the construction sector. Following growth of 4.6% in 2005, St. Lucia recorded its fifth consecutive year of real growth driven by increased value-added in the construction, road transport, electricity and banking sectors.*

The construction sector remained a major impetus of the overall economic growth observed in 2006. Building on the momentum in 2005, the sector recorded robust growth, estimated at 13.2% in the review period. As a result, its share of real GDP increased from 8.1% in 2005 to 8.7%. This was fuelled by both significant public investments in infrastructure and buoyant private sector spending on hotel and residential construction. These, to some extent, were undertaken in preparation for the joint hosting of the Cricket World Cup 2007.*

*Source: Saint Lucia 2006 Economic and Social Review.

Mortgages
All payments are made in US dollars. Financing is available locally and general terms are up to 70% LTV (loan to value). Mortgage terms are between 15 and 25 years (often with no age limit) and rates are linked to either Libor or US Prime. The mortgage types available are standard repayment mortgages at fixed or variable rates. It is possible to get interest-only mortgages depending on personal circumstances, but at a lower LTV.

Draw down mortgages are an option for properties under construction, such as Ocean Breeze and the mortgage will start during construction.

Taxation
There is a 2% stamp duty and an Aliens Landholding License of EC$5000 or US$1,850
involved with a purchase at Ocean Breeze Villas. There is no VAT payable on property and no capital gains tax in St. Lucia.

Once your property is completed and handed over, you can sell at any time thereafter. A VendorsTax is payable at the rate of 5% for locals and 10% for foreigners. However, if the property is originally purchased by a corporation (which is recommended) and is the only asset belonging to the corporation, there is a share transfer tax of 0.5% at the time of sale.

To form a local company, you are required to provide three names in priority sequence, and it will cost approximately £900 or US$1,800. Your lawyer in St. Lucia can form the company on your behalf and their premises can be used as the registered office. The annual running costs for the company which includes annual returns and preparation and filing of accounts is between £500 - £600 or US$1,000- US$1,200.

There are no estate duties in St. Lucia and if you die your property passes to your heirs as it would in the UK or North America or as instructed in your will. Whilst you do not need to make a will, it is always advisable. The will from the Owners’ country of domicile would be recognised in St. Lucia.

There is an annual property tax of 5% of the annual unfurnished rental value of the property. For example, if a three bed unit would rent for US$5,000 per month; the tax would be US$250 per month or US$3,000 per annum. This Tax is not included in the Villa dues and is the responsibility of each individual owner. There is normally a 10 year period of tax exemption on all rental income.*

*Personal taxation issues should be discussed with your accountants or tax advisor.

Lawyers
It is essential that you appoint an established and reputable lawyer to take you through the processes of buying a property abroad and protect your interests with a guarantee that the purchase of your property will be carried out satisfactorily and within the law.