Real estate capital gains tax in St. Barths: what do sellers pay?

The sale of real estate located in St. Barths is subject to a local capital gains tax: 35% when the sale takes place before the eighth year of ownership, 20% after that. A holding-period allowance leads to full exemption after eighteen years. The tax applies to every seller, resident or not.

Who pays capital gains tax in St. Barths?

The St. Barths Tax Code (articles 100 to 109) taxes the sale of real estate located in St. Barths, of rights in real estate, and of shares in companies that own real estate on the island, known as “real estate entities” for tax purposes. It applies to any person, resident or not, individual or company. See also the other taxes in St. Barths.

Real estate capital gains: rates and allowances

Situation	Rate	Allowance
Sale before the eighth year of ownership	35%	None
Sale after that	20%	10% for each year beyond the eighth
Primary residence occupied continuously for five years	20%	20% for each year beyond the eighth
Property received by gift or inheritance	Depends on the holding period	20% for each year beyond the eighth

Time therefore matters at several points.

Holding period	What changes
Five years	20% rate for a primary residence occupied continuously
Eighth year	The rate drops from 35% to 20%, and the allowance starts
Thirteen years	Exemption for a primary residence and for property received by gift or inheritance
Eighteen years	Full exemption in the general case

How is the real estate capital gain calculated?

The gain is the difference between the sale price and the purchase price, after adjustments (article 102):

• the purchase price is increased by acquisition costs, with a flat rate of 6.5%, and by documented improvement work, with a flat rate of 15% after five years for a built property;
• the sale price is reduced by agency fees, property inspection reports and the cost of releasing a mortgage.

For inherited property, the value reported in the estate return serves as the reference.

The tax is paid by the notary (the public legal officer who handles the sale) when the deed is registered. The capital gains return is attached to the deed. For the buyer, see the duties and taxes on purchase; for a property that is rented out, the tourist tax on a rented villa.

Example: a villa resold after four years

Take Claire, who bought a villa for €2,000,000 in 2022 and sells it for €2,800,000 in 2026, without having done any work on it. It is not her primary residence. The agency fees she bears come to €70,000. The amounts are assumptions, for illustration only.

1. Adjusted sale price: €2,800,000 - €70,000 = €2,730,000.
2. Acquisition costs, at the 6.5% flat rate: €2,000,000 × 6.5% = €130,000.
3. Adjusted purchase price: €2,000,000 + €130,000 = €2,130,000.
4. Gain: €2,730,000 - €2,130,000 = €600,000.
5. Tax: the sale takes place before the eighth year, so the rate is 35% and no allowance applies. €600,000 × 35% = €210,000.

If Claire sold	Rate	Local tax
In 2026, after four years	35%	€210,000
Beyond the eighth year	20%	Reduced by the allowance, to be calculated
After eighteen years	Exempt	€0

Between the eighth and the eighteenth year, the amount depends on the exact date of sale and is worked out with the notary. This example covers the local tax only.

Does selling a company’s shares avoid capital gains tax?

Since article 102 bis was rewritten in December 2024, selling the shares rather than the property no longer changes the outcome. The gross gain is the difference between the market value of the real estate on the day the shares are sold and its market value when it entered the company, or on the day the seller acquired the shares. The holding period runs from the date the property entered the company. See our insight on holding property through a company.

Exemptions from real estate capital gains tax

Article 105 exempts, among others:

• sales by or to the Collectivity (the island’s government) or the French State, and expropriation followed by reinvestment;
• property whose full-ownership value is €50,000 or less;
• the contribution of real estate to a company between relatives up to the fourth degree of kinship, in exchange for shares only, subject to a ten-year holding commitment by the shareholders and by the company;
• since 2024, sales of real estate between companies with the same family shareholders, and between individuals of the same family up to the fourth degree, subject to a ten-year holding commitment by the buyer.

When must a seller appoint a tax representative?

A seller whose tax home is neither in St. Barths nor in France must appoint an accredited tax representative (article 109 bis). The same applies to a company whose shareholders are in that position. There are three exceptions: a price below €50,000, an exemption earned through the holding period, or ownership of more than eighteen years by a company.

Does the seller still owe French tax?

A seller who is still a French tax resident, because they live in France or have been on the island for less than five years, remains a French taxpayer on their worldwide income. As for French social levies, whether they apply to the local-source income of five-year residents is debated and handled case by case. See what France still taxes.

Real estate capital gains: common mistakes

• Assuming you are out of scope because you are a resident, or a non-resident. The tax applies to everyone.
• Mixing up the time limits. The eighth year for the rate, eighteen years for exemption, thirteen years for a primary residence and for property received by gift or inheritance.
• Counting on the primary residence for an exemption. It gives access to the 20% rate after five years of occupancy, not to an immediate exemption.
• Breaking a holding commitment. The family exemptions depend on ten years of continued ownership.
• Selling from abroad without an accredited tax representative.

Real estate capital gains: the bottom line

Real estate capital gains in St. Barths are taxed at 35% when the sale takes place before the eighth year of ownership, and at 20% after that. An allowance of 10% for each year beyond the eighth leads to full exemption after eighteen years. A primary residence occupied continuously for five years is taxed at 20%, with an allowance of 20% per year and exemption after thirteen years. The tax applies to every seller, resident or not, individual or company, including on the sale of shares in a company that owns real estate on the island. The holding period, the ownership structure, the type of property and the seller’s residency are best checked with an advisor before listing.

A note for U.S. readers: this article covers French and St. Barths rules only. U.S. citizens and green card holders remain subject to U.S. tax on their worldwide income wherever they live.