Buy a property on the unspoilt, laid-back islands of St Kitts and Nevis and as an 'economic citizen', you could live income-tax-free.

As the Costas convulse and Dubai sinks into sand, there is somewhere in the world where the sun still seems to be shining on property developers.

It is precisely the underexploited, old style "real" Caribbean feel that is SKN's principal draw for many. Kevin Horstwood, a designer from Lincolnshire, travelled the Caribbean looking for a site for his property venture and found that St Kitts "ticked all the boxes": the environment, that is, rainforested volcanic slopes in the interior, ringed with small coastal villages and pleasant beaches with Atlantic on one side and the Caribbean on the other; heritage, in the form of old sugar mills and plantation houses; low crime; "reasonable" infrastructure; less poverty and fewer social problems than the bigger islands. Sunday best is still worn, the tiny, packaged churches outnumber the beach bars, and the pace is measured and courteous.

James Cabourne, a reinsurance broker from Surrey, has bought a plot on the Ocean's Edge development on Cable Bay, in Frigate Bay, near Basseterre, the capital. He was attracted by the situation of the hillside development of 23 villas and 170 condominium units, with prices starting at £225,000: they are within walking distance of Caribbean and Atlantic beaches, and close to a golf course and lively beach bars. It was also cheap compared to the peninsula, with a strong rental market. Some of the finished flats on Ocean's Edge are being let out at about £1,250 a month.

Like many - but not all - new developments, it offers two perks. First, it is in a tourist development zone which means overseas buyers are exempt from the alien land-holding licence fee (usually 10% of the purchase price). Total buying costs (including legal fees) would therefore add just 1.2% to the purchase price. Second, those buying these are entitled to an "economic passport". The scheme, introduced in 1984, confers full citizenship rights except voting in this income-tax-free territory - provided you pass government scrutiny, buy a property for a minimum of £215,000 and pay a one-off fee of about £30,000. According to Ricky Skerrit, the tourism minister of St Kitts, economic citizenship is driving the property market at the moment. Overseas Homes Forever have a range of properties for sale in the St Kitts area starting from $285,220.

Then there is Nevis, smaller of the two islands, lies two miles to the southeast across a channel called the Narrows, and has a long tradition as a quietly upmarket holiday destination. Nevis may also soon become the first carbon-neutral island in the Caribbean, when its geothermal energy project starts producing electricity from high-pressure steam trapped within the dormant volcano that created the island.

Several property developments are being built and planned, often in conjunction with the island's elegantly relaxed small hotels. Owners will be able to use the hotel and its services, and can earn some income renting them back to the hotel.

Extracts from the Sunday Times written by Karen Robinson