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The U.S Virgin Islands Stamp Tax: How Does It Work?

USVI Real Estate Transfer Tax — Or, Stamp Tax

If you are looking to buy or sell property in the United States Virgin Islands, you must have heard about real estate transfer tax otherwise referred to as stamp tax. Normally, when buying or selling a property in the U.S Virgin Islands, this tax is imposed while making a transfer in real estate property between two parties within the jurisdiction. Among the places which are unincorporated territories of the United States are St. John, St. Croix, St. Thomas, and Water Island. This simply means that purchasing property in any of these islands automatically accords you equal guarantees, constitutional protections, and equal rights as any other place in the United States.

Some states have diverse transfer tax laws that may have certain exemptions on certain types of buyers based on income level or buying status.

Normally, when carrying out a transaction on property in any of the named islands, the Contract of Sale for the property puts down the expenses incurred by each party in order for it to be accounted for during closing. A particular classification of levies is assigned to recording fees which are needed by the Office of the Recorder of Deeds to carefully record a deed in the Virgin Islands. These fees include the recording of deed fee, stamp taxes, the release of mortgage fees, and release of lien. The buyer facilitates the recording of deed fee while the seller accounts for the release of liens and mortgages. However, the recording of deed fee, which is the most bargained for, can be allocated to either the buyer or the seller or may even be split between the two parties. Regardless of the contract, in order to record the deed, one is required to produce the stamp tax fee at the Office of the Recorder of Deeds.

Why the USVI Stamp Tax important?

The USVI stamp tax is determined by the value of the property—buyers and sellers have the notion that the value of the property is the contract price or the one indicated on the deed. Normally this is the case, but during the delivery of real property where the indicated value in the deed may be insufficient, the estimated value for property taxes can be used to come about with the amount due for stamp tax.

The estimated value of property in the U.S Virgin Islands is governed by the State through the Tax Assessor’s Office.

As of current, the Government of the U.S. Virgin Islands indicates that any property worth for recording purposes have to be as great as the estimated value of the possessions for purposes of property tax, and so, the substantial of the two values have to be used when calculating the recording fees.

Expenses between parties transacting a property

Below is a breakdown of stamp taxes present in the U.S. Virgin Islands:

  • 2% for properties valued at $350,000
  • 2 ½ % for properties valued to the excess of $350,001 to 1 million
  • 3 % for properties valued to the excess of $1,000,001 to $5 million
  • 3 ½ % for properties valued above $5 million

*The stamp tax rates provided here are for general reference only. Please contact your Islandia Real Estate Agent for the most up-to-date information.

Being aware of who is required to pay the stamp tax in the U.S. Virgin Islands and also what value the property will be valued at for recording purposes is important when it comes to real estate transfer tax in the U.S. Virgin Islands such as St John stamp tax. It’s, therefore, recommendable to consult an attorney conversant with property law prior to engaging in a contract of sale for the purchase of property within the U.S. Virgin Islands.


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