|Published Articles on Real Estate - Anguilla Life Magazine|
An often heard Government complaint in the real estate world on
Anguilla concerns the fact that Alien Land Holding Licenses are
applied for and issued, but then either not registered or not
honored--not registered insofar as transfer tax / stamp duty is
not paid, not honored insofar as the time table for construction
is not followed.
The problem is a real concern for all of us for two primary reasons:
1. It is important that Government be able to pace License issuance
with job creation requirements in an effort to ensure that construction
activity is sufficient to keep Anguillian contractors in work,
without overheating the market thereby creating the necessity
of importing labor.
2. It is important that Government remain comfortable with issuing
new licenses, for any discomfort in issuing new Licenses punishes
new applicants as a result of the inappropriate behavior of previous
I believe both problems can be overcome by the creative reallocation
of existing fees, taxes, and stamp duties.
Currently, the Alien Land Holding License Application fee is EC$665,
an amount which is so low as to encourage the simply curious to
apply, an amount which is easy to forfeit if an applicant changes
his mind, an amount which does not cover Government's costs in
reviewing the Application.
A more reasonable approach would be to drastically increase the
application fee, whereby a portion of that fee would be refunded
if the License was refused, or applied to transfer tax / stamp
duty when an approved License is registered, or forfeited if the
License is approved but not registered within a given time period,
at the termination of which time period the License is null and
As an example: a US$5000 application fee, whereby US$2500 would
be returned if the License was refused, or US$2500 would be credited
to transfer tax / stamp duty if the License was approved and registered
within 90 days, or US$5000 would be forfeited if the License was
approved but not registered within the 90 day life of the registration
Furthermore, the penalties which are currently in place to encourage
adherence to the terms of the License are so low as to invite
applicants to ignore their construction schedules.
Currently penalty fees begin 18 months after License approval,
and are EC$500 per month for the first 12 months after the 18
month grace period, with penalties of EC$1000 per month for the
next 6 months, with forfeiture to the Government possible after
the 18 months of penalties (a forfeiture process which has yet
to be implemented).
However, for the penalties to have real bite they should begin
after a longer initial time period, but then be increased and
made more specific--they should allow time for the applicant to
progress steadily, but provide remedy for Government that is swift
and secure if such progress is not made.
As an example: the time schedule for construction should be increased
to 24 months from the date of License registration, but the penalty
should be increased to a monthly amount of 10% of the performance
deposit currently required, with auction of the property to commence
after the performance deposit is depleted (i.e. in 10 months after
the 24 months allowed).
In order to achieve these goals, Government should register both
a charge and a caution on alienated property at the time the applicant
registers the land into his name. Such a policy would enable Government
to more easily exert control over the property as per the Registered
Land Ordinance, for as the holder of a charge the Government can
auction the property or appoint a receiver if the owner of the
property does not perform (i.e. does not submit an authorized
certificate of occupancy or substantial completion), and as the
holder of a caution the Government can control all activity of
the property with regard to sales, leases, or additional charges.
This combined impact of creatively increased application fees and penalties would not deter the serious participant, would discourage the speculator, and would smooth out the real estate cycle for us all.
|Home | About Us | Anguilla Real Estate Sales | Villa Rentals | Resources|
|Sotheby’s International Realty ® is a registered trademark licensed to Sotheby’s International Affiliates LLC.
Each Office is independently Owned and Operated.