US Virgin Is.: Overview

RENTAL YIELDS

Last Updated: Jan 14, 2008

USVI apartments at US$4,000 per sq. m

Apartments in St. Thomas sell for around $3,312 per sq. m. Prices per sq. m go up as apartment size increases. Same goes for house prices per sq. m. Average house price in St. Thomas is $4,320 per sq. m, with 200-sq. m houses selling for $2M.

St. Croix properties are cheaper. A 180-sq. m apartment sells for half the price at $2,026 per sq. m. Also for 200-sq. m houses at around $1M.

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TAXES AND COSTS

Last Updated: Oct 10, 2007

US Virgin Islands tax ranges from moderate to high

Effective Tax Rate on Rental Income
Monthly Income	US$1,500	US$6,000	US$12,000
Tax Rate	nil	0.7%	2.3%
Click here to see a worked example
Source: Disclaimer

Rental Income: Rental income considered “not effectively connected income” is taxed at a flat rate of 30% on the gross amount, withheld by the tenant. Nonresident foreigners electing to consider their rental income as “effectively connected income” are taxed on their net income at progressive rates.

Property: Property are imposed at 1.25% of the property’s assessed value. The assessed value of the property is generally 60% property’s fair market value.

Capital Gains: Capital gains taxes are imposed at a maximum rate of 15% for properties held for more than a year.

Inheritance: Foreigners and non-permanent residents of the United States are not subject to inheritance taxes in the US Virgin Islands.

Residents: Acquiring residency in the Islands brings the benefits of a green card.

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BUYING GUIDE

Last Updated: Mar 24, 2008

Buying costs are moderate in the US Virgin Islands

Roundtrip transaction costs range from 10% to 14.6% of property value. The transfer tax ranges from 2% to 3.5% depending upon property value. The real estate agent's fee, at around 6%, accounts for the greater part of the costs. Legal fees are at 1% to 2%.

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LANDLORD AND TENANT

Last Updated: Jun 15, 2006

US Virgin Islands law is pro-tenant

Rent Control: Rents in the US Virgin Islands are frozen at their 1947 level be the Rent Control Act.

For existing housing accommodations prior to July 1947, the maximum rent ceiling is the rent imposed on July 1947. For properties built afterward, the maximum rent allowed is the initial rent charged for the property.

Tenant Security: For reasons other than rent default, the landlord must give the tenant a month’s notice of termination and must apply for a court approval prior to evicting the tenant. If the landlord is given the right to repossess the property, the tenant can delay the eviction for up to six months to give him ample time to look for alternative housing.

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ECONOMIC GROWTH

Three Virgin Islands

The US Virgin Islands is composed of three main islands: St. Croix, St. John, and St. Thomas. The archipelago is an unincorporated US territory. Most Federal laws apply, though Customs policies differ.

Island belongers are considered American citizens and enjoy all the benefits and rights this status has to offer. They are represented in the US House of Representatives, but not in the Senate, and are not allowed to participate in the Presidential elections. But the Island government acts in relative autonomy.

St. Croix is the largest of the three, yet not the most developed. It has many isolated beaches, dense forests, and fertile lowlands. It used to be one of the region’s wealthiest islands, with a multitude of sugar plantations and a successful slave trade. Colonial ruins lie amidst the beautiful scenery. From St. Croix, it is a short boat ride to the Buck Island nature reserve.

St. John, on the other hand, is the smallest and most serene. Two-thirds of the island is a protected National Park that is a favored tourist destination. There are about 40 beaches to relax in and numerous water sports to enjoy.

A 45-minute boat ride takes you to St Thomas’ capital, Charlotte Amalie, the commercial center of the US Virgin Islands. Every year, more than a million cruise passengers alight in the harbor to tour the towns and indulge in duty-free shopping.

International business and offshore financial services are growing sectors vital to the islands’ economic development. Import duties are a major source of revenue for the government because the islands import most food products for domestic consumption.

Today tourism is the primary economic activity, accounting for 80% of GDP and employment. The islands normally host 2.5 million visitors a year, many of whom visit on cruise ships.