THE REAL ESTATE MARKET IN ANGUILLA

In September 2016, a white paper was prepared by the Government of Anguilla on Revitalizing the Real Estate Market.
The purpose of this paper was to propose fiscal interventions, that would both improve the faltering banking sector and boost growth and employment in the construction industry, through reducing stamp duty under the Aliens Land Holding License (ALHL) Regulation Act fee; and incentivizing construction through the provision of import duty concessions.

In December of 2016, Executive Council considered and approved the implementation of a formalized program for offering a reduction of the applicable Stamp duty under the Stamp Act and Stamp Duty under the Aliens Land Holding Licence (ALHL) Act for purchases of residential properties with the aim of stimulating economic activity in the Real Estate and Construction sectors. This program reduced:
– Stamp Duty on Transfers for Anguillians from 5% to 2.5% for a period of three (3) years; and
– Stamp Duty for Aliens Land Holding Licence on Villas/homes from 12.5% to 5% on constructed properties and from 12.5% to 6.25% on land purchases, for a period of twenty four (24) months. Both of the items have been extended until 31st December 2021.
It is important to note that the tourism and resort sectors play an ever important role in shaping Anguilla’s economy as the island is highly dependent on same. The Tourism sector has been noted as one of the major contributors to driving the island’s economy and is a gainful employer of the island’s labour force. The development of the tourism sector is also key to the performance to the Real Estate Market contributing to the construction and sales of resorts, villas/residences and condominium units.

Additionally, over the past years, the Government of Anguilla would have signed a number of MOUs/MOAs, which are binding agreements and set the ALHL rates payable. For example, SOF and the Government of Anguilla on 17th September 2010 signed a MOU which sets rates on initial sales and re-sales, as well as the granting of an exemption period.

In certain cases, some of the conditions under the MOUs/MOAs have been extended for additional periods. Based on the analysis of the Real Estate Market over the last seven (7) years, approximately 70% of the Stamp Duty revenue has been a result of ALHLs fees as opposed to Stamp Duty from Anguillians.

Further, if the policy is revoked, this can further impact revenues especially in the local market with little spending power, as well as significantly cooling off revenues going forward. Such can have a spiraling negative impact on real estate developments, construction, refurbishment, infrastructure and the economy on a whole. The reduction in Stamp Duty under both Acts will impact the overall revenue, but there is the potential uptick that the increase in activity will surpass this loss and generate more activity in the market, which is oversupplied with properties which on average have taken two (2) to three (3) years to trade on the market.

In addition, there is an upsurge in economic activity in the construction industry and the wider economy as we see a number of new home owners purchasing property to build or to renovate. Therefore, in the end, the revenue position will be through the multiplier effect on the economy of increased activity in the Real Estate and Construction sectors.

Mr. Kenneth Hodge
Minister, MOHA

– Press Release
27, September 2021

Written by UBR 97.7FM