REAL ESTATE - MARKET INTRODUCTION
The Anguilla Real Estate Market has seen tremendous change over the past decade. Up until 2004 tourism development on the island was limited to the 3 main boutique hotels on the island (Cap Juluca, Malliohana, and Cuisinart), some smaller local hotels and a smaller number of individuals who has bought land to develop a private villa. In essence there was nothing developed specifically for sale.
The Government for the island has had a strategic policy in place to limit development to the luxury market and been successful in preventing mass market hotel and multi-story condo buildings from coming to the island. As such, the focus has been and continues to be on the higher end of the tourism market.
In 2004 and 2005 the Temenos and Viceroy projects commenced as the first "for sale" developments to arrive. A limited number of other smaller projects, such as
Kamique, Shoal Bay and Lockum Villas were also initiated. This influx of activity came at the same time as Anguilla was getting increased coverage and exposure for the great beach destination that is is and land prices escalated quickly - on average between 300 - 4--% between 2004 and 2007.
This huge influx of interested buyers led the Government to put in policies that limited the pace of the alienation of land as well as limiting the amount of large scale development through a moratorium. Other luxury developments have been planned, including the Fairmont, Altamer and Rendezvous Bay, although these projects have been put on hold for the foreseeable future.
As such the Real Estate market today in Anguilla remains focused primarily on the Luxury market with a mixed offering that includes resort estates villas and residences, private stand-align villas, and an increasingly limited amount of waterfront land.
While there is some softening in prices expected over the coming 1-2 years, the Government policies in place, the limited amount of “for sale” development to date, and the limited about of waterfront land available are all expected to provide some support for prices in the short term. The short term softening of prices is expected to occur should provide good investment opportunities for the long term as Anguilla, with its unparalleled white sand beaches, amazing collection of restaurants and, warm and friendly local population, is always expected to be a hugely desirable location.
REGULATIONS AND POLICIES
Anguilla operates under British Common Law including standard laws and regulations with regards to land ownership and title. Its Land Registry is open and accessible to the public, providing clear and transparent access to information in the form of title searches and other market assistance.
As a means to control the Alienation of Land, there laws and policies in place that deal with the Purchase and Sale of Property by Foreign Individuals or Foreign Controlled Entities, which collectively we will refer to as “Aliens”. Most significantly are a Alien Land Holding License (ALHL) Requirement and Licensing Fee.
All Aliens wishing to purchase property on the Island are required to obtain an ALHL, which is granted to specific to each specific Property – meaning that a license is required for each parcel to be purchased. The Application, which is applied for after an agreement for purchase and sale is reached between buyer and seller, includes a range of documents as part of “background check” and initial planning approvals which outline the intended purpose and use of the property to be purchased. Applications are reviewed by various ministries and ultimately decided on by the Governments Executive Council. Applications typically take between 3-6 months to process although this time can vary greatly depending on the Government priorities. The same process is used for the resale of a built property, although the planning permission component is unnecessary.
For all purchases, be it by an Anguillian or Alien, there is a 5% Transfer Tax on the value of the property that is charged to the Purchaser. For Aliens there is an additional 12.5% Alien Land Holding License Fee assessed to the Purchaser on the value of the property. Real Estate taxes are negligible - under US$1,000 per year for a normal 3 bedroom villa – so in essence the Alien Land Holding License Fee serves as an up-front payment of Real Estate taxes on relative basis to Real Estate Tax rates internationally.
There are policies in place that are intended to limit Aliens to one parcel/property and limit land ownership to ½ acre. Applications outside of these limits are considered and granted on a case by case basis, with the land size requirement more strictly enforced on parcels over 1 acre that intended solely for private purposes.
Foreigners may, contrary to common discussion, buy Beachfront Land although, due to it being a limited “resource”, Beachfront must be developed for Tourism purposes not for private dwellings. Beachfront property, as would be expected is extremely hard to find for purchase and when it is available attracts a huge premium over common waterfront land.
In sum, while the policies for purchase and sale may be time consuming and cumbersome, they serve to limit the amount and type of development, insure a group of foreign buyers that are more desirable and create a barrier to entry to increases the value of land and property on the Island.
