tel 264.498.01235
fax 264.497.2820
anguilla.properties@sothebysrealty.com
Anguilla Real Estate Sales Anguilla Office Marketing Options Anguilla Info Anguilla Villa Rentals  
 
Published Articles on Real Estate - Anguilla Life Magazine
 


 
    Anguilla:
  Tranquillity
   Wrapped
         in
      Blue

RENTAL RIGHTS REVIEWED... AND REVIEWED

The ongoing saga of expatriate rental rights continues--with no end in sight. Even though Government has put some proposals forward, I understand most of them have already been revised or rejected--unfortunately, this lack of clarity doesn't help the real estate market or real estate values…nor does it help Anguilla's economy. Herein I'll try to outline where we are to date, and where we might be going.

First and foremost I think it is very important to stress the fact that Government has apparently abandoned its "no rent" position with regard to the issuance of new Alien Land Holding Licenses-unfortunately the "no rent" policy was in place long enough to terminate at least one viable transaction (and perhaps deter others) but fortunately that draconian position has seemingly been rejected.

In the draft policy paper that Government released in March 2002, it was suggested that all expatriate properties be categorized either as a "home" which they defined as a property that would not be rented, or as a "villa" which they defined as a property that would be rented-furthermore it was suggested that these two classifications be assessed in separate ways. In the case of "homes" it was proposed that a US$1,000 annual fee be paid to Government-in the case of "villas" it was proposed that a US$5,000 annual fee be paid along with a US$.50 per square foot surcharge levied after the first 2,000 square feet of development…in addition, it was proposed that all "villas" would have to retain the services of a local registered agent for the "collection and payment of fees payable to Government". Furthermore, with regard to new purchases, a two tiered transfer tax approach was proposed-if a purchaser wanted to register his property as a "home" they would have to pay a total of 25% in stamp duties and taxes, however if a purchaser wanted to register their property as a "villa" they would have to pay 17.5% (the current rate for all expatriate property transfers).

With the foregoing in mind, I have been told that most of the above reference proposals are already under review and will be changed. For example, the US$1,000 annual fee for "homes" has been discarded-numerous expatriates complained bitterly about this fee, including the many Caribbean nationals that own property on island by virtue of an Alien Land Holding License who would have been subject to the fee along with their North American and European counterparts. In addition, I have been advised that the proposed US$5,000 annual "villa" fee will be reduced-brought down to the US$3,500 to US$4,000 range for those whose Alien Land Holding Licenses do not specify an annual fee of US$1,200 (which was the default fee before the policy was put on hold). For those whose current license does specify US$1,200 as the annual rental fee, their fee will remain unchanged for the duration of the time they own their property-however, insofar as Alien Land Holding Licenses run with the property owner and not with the property itself, new purchasers will be subject to the rates in place at the time of their purchase. Furthermore, the two tier transfer tax system proposed apparently needs Legislative Council approval (not just Executive Council approval) so that component of the March proposals has also been shelved.

So, where are we? In truth, I think it's very hard to know-these are uncertain times. However I do think it is fair to say that Government is now quite aware of the importance of the villa rental industry and will not undermine it-although do I believe that would have been the effect if their "no rent" policy on new Alien Land Holding Licenses had remained in place…and, perhaps, if all of their March 2002 proposals were enacted. However, just to throw one final element of confusion into the mix, I was recently advised by Treasury that they are so baffled as to how to charge for villa licenses, they will accept either the US$1,200 annual fee (referenced above) or a per bedroom fee (which ever the villa owner prefers). The fee per bedroom for properties that charge over US$300 per night is EC$250, and the fee per bedroom for properties that charge under US$300 per night is EC$100-which means a villa owner who has a four bedroom villa for which they charge (say) US$7,000 per week could pay only EC$1,000 for their right to rent. Are we all confused yet? I certainly am…let's hope the future brings some clarity and cohesion.

Back

 
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.