Published 20 February 2018
Buckie Got It, St. Kitts and Nevis News Source
by: Media Source
Failing to heed advice, PM Harris makes last-ditch rescue real estate option
Basseterre, St. Kitts, February 20, 2018 – After months of denial, Prime Minister Dr. Timothy Harris in a failed effort to haul in EC$150 million under the Hurricane Relief Fund, by slashing selling St. Kitts and Nevis passports at US$37,000, has finally realized that his decision may have done irreparably harm to the real estate option.
In a last-ditch attempt to rescue the once-prized real estate option which sold a condominium for not less than US$400,000 each, and what was said to be a stormy meeting with real estate developers recently, Dr. Harris announced a 50 further 50 percent cut, this time in fees, that will result in less revenue going into the nation’s treasury.
After the Hurricane Relief Fund was unveiled, Leader of the Opposition, the Right Hon. Dr. Denzil L. Douglas in a statement issued on October 3, 2017 said: “This wrong-headed policy renders the Real Estate option worthless. It is the Real Estate option that provides jobs in construction and related field, and promotes the consumption of materials and transportation services. So many developers who have deeply invested in the Real Estate option woke up on September 23rd to learn that their investment to the tune of millions of dollars is now worth hardly anything. The anticipated time to recoup their investment in real estate has moved from one or two years on average to potentially ten years and over, if ever. Thousands of plumbers, carpenters, masons, electricians and others are now on the verge of losing their jobs, and potentially their properties that have been mortgaged to the bank. Prime Minister Harris is reckless and demonstrates little understanding of the interplay between the CIP and the local economy.”
Christian Henrik Nesheim, Founder and editor of Migration Insider. leading source of intelligence for the Citizenship and Residence by Investment Industry agreed with Dr. Douglas and in an article captioned: All I Want for Christmas is a CIP Accord in the Caribbean: 5 Reasons to End the Price War,” said the current price war started by St. Kitts and Nevis’ Prime Minister Dr. the Hon, Timothy Harris with the introduction of the Hurricane Relief Fund “negatively impacts actual investment in private sector enterprise.”
“Lower contribution requirements make the real estate options relatively more expensive. Cash donations are a great source of up-front revenue, sure, but tracing the money’s impact on the real economy is not a straightforward task, particularly in those Caribbean nations where the government has full control of the funds and have a laid-back approach to transparency and to reporting how the contributions are distributed,” wrote Nesheim.
He said that the real estate development, on the other hand, “provides jobs – in construction, hospitality, and goods supply – and can lay the foundation for a durable expansion of the tourism sector.”
“Crucially, capital invested in real estate ends up in private hands rather than in the custody of (notoriously profligate) bureaucrats, which means the return on capital is potentially far greater,” said Nesheim.
Last Tuesday Dr. Harris unashamedly told the National Assembly that the reasoning behind the reduction in the fees was “a group of real estate developers had lobbied his Cabinet for a downward adjustment of the fees” which were slashed by 50 percent. It means the government will collect less money from the crumbling Citizenship by Investment Programme.
