Netherlands Antilles: Overview
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Five islands go separate ways
The Netherlands Antilles is physically divided into two groups; the Leeward group (composed of Curacao and Bonaire) and the Windward group (composed of Saba, St. Eustatius, and Sint Maarten). Politically, the five major islands are part of The Federation of the Netherlands Antilles under the Kingdom of Netherlands.
However, the federation will be dissolved in December 15, 2008. Following referendums, Curacao and Sint Maarten will become constituent countries within the Kingdom of Netherlands. The three other islands, Bonaire, Sint Eustatius and Saba will become direct parts of Netherlands as special municipalities.
Unity in the federation has diminished in recent years. Curacao and Sint Maarten, major tourist centres in the federation, say they can stand alone economically. The smaller islands say their concerns have been overlooked. There is still much uncertainty and negotiations associated with the dissolution.
Curacao is the de facto successor of Netherlands Antilles. Together with Aruba (another country within the Netherlands), Bonaire and Curacao form a group called the ABC Islands of the Leeward Antilles. These islands lie outside the Hurricane Belt, an added attraction for property buyers.
There are no restrictions on foreigners buying property.
RENTAL YIELDS
Curacao and Bonaire properties are cheap
The average price of a three bedroom house in Curacao and Bonaire is around US$525,000; while a four bedroom house is at US$640,000. A two bedroom apartment can be bought at around US$295,000. Properties in Curacao and Bonaire are significantly cheaper compared to the rest of the Caribbean but are slightly higher compared to Aruba.
TAXES AND COSTS
Netherlands Antilles rental income tax is moderate
Rental Income: Non-resident’s rental income exceeding Netherlands Antillean Guilder (ANG) 23,950 (US$13,456) is taxed at progressive rates from 11% to 39%, depending on the tax base. Additionally, surtax is applied on the income tax payable; 30% surtax in Curacao and 25% surtax in the other islands.
Capital Gains: There are no capital gains taxes.
Inheritance: Heirs inheriting property located in the Netherlands Antilles from a nonresident are subject to a special conversion tax, at a flat rate of 8%.
Residents: Resident individuals are taxed on their worldwide income.
BUYING GUIDE
Buying costs are moderate in Netherlands Antilles
Round-trip transaction costs, i.e., the total cost of buying and selling a property, are around 9.2% to 14.4% of the property's value.
The buyer usually pays the 4% transfer tax, and the registration costs of 1% to 2%. The seller pays the agent’s commission, which can range from 4.2% to 8.4% of the property's value.
LANDLORD AND TENANT
Netherlands Antilles' law is pro-tenant in practice
Rent: Rents and rent increases can be freely negotiated. Long-term rental agreements usually cover one year, with automatic renewal after the first year.
Tenant Security: Non-payment of rent and breaching the terms of the rental agreement are grounds for eviction. But evicting local tenants can take a long time.
ECONOMIC GROWTH
Standing on their own
The economy of the Netherlands Antilles is highly dependent on tourism, albeit with some oil refining and offshore financial services. GDP grew by an average of less than 1% from 2001 to 2005, after contracting between 1998 and 2000.
Curaçao, with a total land area of 444 sq. km. is well known for its coral reefs which make it an excellent spot for scuba diving. The beaches on the south side contain several diving spots. Aside from tourism, main industries of the island include oil refining and financial services. Shipping and other activity related to the port of Willemstad also makes a considerable contribution to the economy.
Bonaire, with a total land area of 288 sq. km, is similarly known its excellent scuba diving sites. It is often rated as one of the prime areas for shore diving and one of the best Caribbean diving locations in the world. The island is surrounded by a coral reef which is easily accessible from the shore along the Western and Southern sides. Furthermore, the entire coastline of the island has been declared a marine sanctuary, preserving local fish life.
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| RESIDENTIAL PROPERTY FACTS | |
| Price (sq.m): $4,889 For a 120 sq. m. property, usually an apartment. | Rental Yield: n.a. |
| Rent/month: n.a. | Income Tax: n.a. Assumptions: Owners are a non-resident couple drawing US$ / €1,500 per month in rent, with no other local income. |
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Roundtrip Cost:
9.0%
The total cost of buying and then reselling an apartment. Includes: * all transaction taxes and charges: * lawyers' and notaries' fees * agents' fees Assumptions: The buyers are non-resident foreigners. The apartment cost US$250,00 / €250,000. |
Cap Gains Tax: 0.0 Assumptions: The property was bought for US$250,000 / €250,000, and sold 10 years later, after a 100% appreciation. |
| Landlord & Tenant Law: Pro-Tenant Rating is based on a detailed study of each country’s law and practice. | |
NOVEMBER 2006
- Green light for St. Maarten to become country - The Daily Herald
- Netherlands, Antilles sign agreement to restructure Caribbean territories’ status - IHT
SEPTEMBER 2006
- Netherlands: Beyond the Headlines (03-05-30) - IRED - Radio Netherlands
- Central Caribbean location makes island’s marine trade industry one of the best (00-03-22) - The Washington Times
AUGUST 2006
- Economic, social growth are not balanced, says Remkes - The Daily Herald
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