Saint Lucia continues to be an attractive destination for second homeowners and property developers.  The real estate market is a dynamic one with ever-growing demand in the second home and luxury home markets.

Post Covid 19 there has been increased volume and velocity in the real estate sector in particular from the US, UK, and Canadian markets with increasing growth in the European market.

As a major tourism destination, the tourism industry significantly influences the real estate market with offerings varying from unbuilt lots, stand-alone homes, condominiums and villas featuring stunning views and premium amenities.  Depending on individual taste, lifestyle, and budget there are suitable options for everyone. 

Saint Lucia's stable political environment and economic policies make it an attractive destination for real estate investment. Foreign investors often explore opportunities in the market, taking advantage of tourism incentives offered by the Government and the country's appeal as a tourist destination

Aliens (Landholding) Licence Act

The new Aliens Landholding Licence Act, introduced in March of 2020 makes property purchases significantly easier with the two-stage process:

The first stage, the Certificate of Eligibility is a due diligence process that clears an applicant to acquire property on the island. An applicant can apply for a certificate that is valid for 12 months or a certificate that is valid for 10 years. Once granted the certificate allows an investor to acquire multiple properties during the validity period.

The Aliens LanholdingLicence is the second stage of the process and is the final step to allow the applicant to acquire a property. This licence is specific to the property and is required to allow a conveyance of property or acquisition of shares in a non-alien company to occur.

A holder of a Certificate of Eligibility may, after acquiring a property apply for an Aliens Investor Entrance Permit. This Permit will allow a holder to remain on the island indefinitely for as long as they retain title to the property and obviates the need to apply for extended stays via the Immigration Department. This has proven very popular with property owners who want to enjoy an extended stay on the island.

Rentals in the Tourism Sector

The newly introduced Tourism Development Act, No. 1 of 2024 creates  a cohesive legal framework and is intended to improve sector standards, encourage more sustainable tourism products and expand the scope of projects eligible for fiscal incentives. Most importantly, the Act allows for the certification of tourism products, including residential properties operating in the tourism market. Apartments, condominiums, villas, and cottages that provide accommodation for visitors will be captured under the rubric of tourism accommodation and owners will be deemed tourism operators.  

Persons operating in the online hospitality service sector like Air BnB, and those operating through local management companies or independent websites will be brought into the tourism sector in a more formal sense.  Certification will be streamlined so that there will be greater adherence to other local legislative requirements.

Common Legal issues

 Some of the most common problems I have encountered relate to (and this is not an exhaustive list):

•         persons placing deposits on properties without getting legal advice;
•         not having formal written contracts in place
•        not having title searches carried out at the outset
•        making offers and entering into agreements before knowing where the consideration for the sale will come from
•        sellers attempting to sell and being in breach of conditions attached to their aliens landholding licence
•        contracts being unclear on what happens to a deposit in the event that an aliens landholding licence is denied (it does happen)
•        applicants for aliens landholding licences not making full disclosure regarding any conviction history

What all of these issues underscore is the importance of professional guidance and advice in overcoming these challenges.

  Due Diligence and Compliance

The legal and regulatory landscapes are constantly evolving and becoming more complex. Due diligence and compliance take center stage as the guardians of integrity and legality in real estate transactions. From scrutinizing property titles to navigating regulatory frameworks, these twin pillars ensure a secure foundation for transactions, protecting both the interests of buyers and sellers.

Compliance and AML have become critical components of legal practice, especially in real estate transactions. To that end, effective June 2023 real estate agents and  legal practitioners engaging in real estate work were required to register with the Financial Intelligence Authority as a supervised entity under the Registration of Supervised Entities Act.

 Summary

Recent trends highlight Saint Lucia's continuing appeal to buyers in the second homeowners' market and property developers with increased activity post COVID-19, particularly from the US, UK and Canadian markets.

The property-owning process has streamlined with the new Aliens Landholding Licence Act and government policies remain friendly to property investors.

The move to introduce holistic tourism legislation, with the inclusion of the property sector providing service in the tourism market can only enhance the island as a real estate investment destination.

As a small island state, it is imperative before embarking on any real estate journey that a potential purchaser or investor connects with a reputable real estate professional or legal expert for the most up to date and specific information regarding the current state of the real estate market in Saint Lucia.