Real Estate 2024 Comparisons

The main sources of real estate law are the Registered Land Act and the Stamp Duty Act.

In an attempt to stimulate the market, since 2017 the government has implemented a reduction of stamp duties on real estate sales.

Over the past 12 months, motivated sellers, coupled with the stamp duty incentive, which was extended to 31 December 2024, resulted in increased sales of properties between locals and also of investment properties for foreign direct investment.

Recent significant deals include:

• the sale of several villas and condominium units (priced between USD500,000 and USD5 million) in the resort managed and operated by Four Seasons Anguilla;
• the acquisition of Cuisinart Resort (now known as Aurora Anguilla Resort & Golf Club) and the transport of the resort’s passengers and others by Aurora Airlines; and
• the sale of several properties with values ranging between USD300,000 and USD3 million.

There are currently no proposals for reform that would significantly impact real estate investment or development.

In relation to ownership, there is a proposal to digitise the Land Registry, which would allow persons to conduct online searches to confirm ownership of land.

Property rights are divided into four categories:

• absolute title;
• concurrent (or co-ownership), whether as joint tenants or tenants in common;
• leasehold interest; and
• a lender is able to register a charge to secure the payment of money or its value or to secure the fulfilment of a condition – this does not give a proprietary right over the property.

The applicable legislation is the Registered Land Act RSA c R30, which applies to all types of real estate.

A lawful transfer is effected on execution of an instrument (Form RL 1 – Transfer of Land) by the proprietor/transferor to a transferee, on payment of the relevant stamp duties and registration fees and submission of the instrument for recording to the government.

Anguilla maintains a registered system of title registration.

Title insurance is common in transactions involving substantial overseas (usually US) loans to acquire and/or develop a property.

Due diligence is carried out by requesting Land Registry searches to establish the legal proprietor and that the land is free from encumbrances that would affect the interest intended to be transferred. A Court Registry search is usually conducted as well to establish if there are any judgments that act as a charge over the property.

Typical warranties are:

• transferor’s warrant that it has the right to sell and that as at the date of the agreement nothing has been done to encumber the property;
• clear title will be delivered on completion of the transaction; and
• there is no dispute or controversy or claim against the property or its appurtenances that are known and there is a registered right or way (access) to the property.

There are no warranties as to the state of the building. Properties are customarily sold as is. The issue of asbestos is not one that customarily affects properties in the Caribbean.

The buyer’s remedies usually include specific performance of contracts and a claim for damages against a party to a transaction.

Representation and warranty insurance is not customarily used in this jurisdiction.

The Anguilla Registered Land Act is the most important piece of legislation for an investor to consider when purchasing real estate.

The intention of the investor will dictate whether or not other statutes are required to be considered, such as:

• the Condominium Act (if condominium units are intended to be constructed);
• the Stamp Act (with respect to duties payable); and
• the Aliens Land Holding Regulation Act (if the investor is a foreigner – not an Anguillian).

Other acts such as the Customs Act will be considered if an investor intends to negotiate with the government and enter into a Memorandum of Understanding for concessions and/or waiver/reduction of custom duties and taxes that will affect a project.

Other permits, licences and approvals are necessary for the project:

• Planning Permits (under the Land Development (Control) Act);
• Building Permits (under the Building Act);
• Trade Licence (required under the Trades, Businesses, Occupations and Professions Licensing Act if the investor is managing and developing the property); and
• Work Permits (issued under the Control of Employment Act) for the management and operation of the project (if the investor makes satisfactory representations to the government that the skills and experience required cannot be identified locally).

The Public Health Act deals with storage, discharge and disposal of contaminants and hazardous materials. Environmental Health Officers are authorised to enter upon any premises with or without the consent of the owner to conduct inspections as necessary under the act.

A buyer should conduct due diligence prior to entering into any contract as environmental protection legislation does not run with the land. If the buyer fails to conduct the required due diligence prior to the completion of the transaction and purchases the real estate as is, where contamination is present and the buyer discovers this and fails to include terms in the contract, then the responsibility for remedial work will fall to the buyer.

An Environmental Impact Assessment may be required depending on the scale and type of development.

There is no zoning legislation save for the Special Economic Zones Act, which affects certain land, areas or locations in Anguilla declared as such by regulation by the Executive Council of the government.

The Land Development (Control) Act, governs the development (building or rebuilding engineering or mining operations; making of material change in the use of building or land; subdivision or alteration of the nature or the character of any land).

The Planning Committee is, however, guided by the Proposed Anguilla National Land Use Plan, which was prepared in consultation with the United Nations Development Programme.

Notwithstanding that there is no zoning legislation, areas are identified by various designations such as:

• institutional/commercial use;
• resort; and
• resort/residential.

Refer to 2.6 Important Areas of Law for Investors with respect to the specific development agreements with relevant public authorities.

The government may compulsorily acquire land under the Land Acquisition Act in instances where the land is required for a public purpose. Once the decision is taken by the government in council, a declaration (which shall include the description of the land, the public purpose for which it is required, etc) is published in two issues of the gazette, which is required to be posted on a building (if any) on the property or exhibited at suitable places in the area where the land is located. The land is automatically vested in the Crown upon the second publication of the declaration in the gazette.

If the premises are occupied during the process, the occupier must be given seven days’ written notice if it is intended to enter upon the land for any reason. As soon as the declaration is made, persons with an interest in the land should contact the government and there should be negotiations for compensation upon reasonable terms and conditions.

Compensation, if any, required to be paid based on the use of the land, shall be assessed and paid based on any actual damage suffered as a result of the acquisition. Such assessment is usually undertaken by a Board of Assessment.

A 5% stamp duty on transfer of land (or undivided share in land) and registration fees are customarily payable by a purchaser, who can negotiate with a motivated seller on any sale.

If the purchaser is not an Anguillian, an Aliens Land Holding Licence (which attracts stamp duty of 12.5%) will be required from the government to legally acquire the property. If the land purchased by a non-Anguillian is undeveloped, a 10% refundable deposit is payable by the purchaser pending completion of construction within a specified time noted on the Aliens Land Holding Licence.

If shares in a company that owns property are transferred, the same principle applies – ie, 5% of the value of the assessed value of land being transferred in the transaction; and USD5 for every USD500 or part thereof on the share or stock in the company, which is payable at the Companies’ Registry.

So long as an interest in property is being transferred, stamp duty on the transfer will apply.

Reduction of Stamp Duties to Stimulate the Real Estate Market (Which Expires on 31 December 2024)

• Aliens Land Holding Licence (developed property) – 5% (down from 12.5%).
• Aliens Land Holding Licence (undeveloped property) – 6.25% (down from 12.5%).

There are circumstances (negotiated with the government) in which:

• the stamp duty payable on an Aliens Land Holding Licence can be reduced or negotiated down to 0%; and
• custom duties can be waived.       

An Aliens Land Holding Licence is required before a foreign person can legally acquire an interest in real estate.

This is negotiated between/among the parties concerned. Typical financing options include personal savings or loans.

The following securities are typically created or entered into by commercial real estate investors:

• a charge over the real estate by the lender;
• a caution preventing dealing with the security without the lender’s (chargee’s) consent;
• life insurance on the principal or directors;
• guarantee;
• debenture over fixed and floating assets; and
• any other security required by the particular lender.

An Aliens Land Holding Licence is required by a foreign lender as this affects an interest in land. There are no restrictions on repayments being made to a foreign lender; the repayment terms are a matter of contract.

Stamp duty on the charge to be registered against the property is 1% of the charge (loan) amount. Stamp duty on the loan document is USD20.

Registration fees on each document are USD37.20. There are no documentary taxes in Anguilla. Notary public fees will vary.

The enforcement of security is dependent on the requirements and steps taken to recover any outstanding amount. This may involve court costs and fees, legal fees and costs resulting in the transfer by the chargee (lender) and the attendant stamp duties and registration fees.

The Articles of Incorporation/by-laws and other underlying documents, if any, of the entity would dictate the legal requirements with respect to the provision of valid security.

So long as the lender holds a first legal charge over the security or at the onset, the lender ensures that the charge ranks pari passu with any existing charge, then the lender, along with the prior charge (lender) will rank in priority to the interests of other creditors.

The Registered Land Act will dictate the steps required to be taken in a foreclosure. After three months of default the lender may exercise its powers of sale and take steps to sell the land at public auction. A defaulting borrower/proprietor, in good faith, may seek to vary the repayment terms of an outstanding loan.

It is possible for existing secured debt to become subordinated to newly created debt in any circumstances, whether by agreement or otherwise, with the consent of the first chargee (lender). The balance due on the existing loan and the value of the security will dictate whether or not a lender will take the security.

A lender holding or enforcing security over real estate cannot be liable under environmental laws if it did not cause any pollution of the real estate, as the interest is not proprietary in nature.

There is no law that makes security interests void if a borrower becomes insolvent. The lender can pursue its rights under the bankruptcy laws.

The issue of interest is one that is subject to negotiation among parties.

The applicable legislation is the Land Development (Control) Act and related protocols – see 2.8 Permitted Uses of Real Estate Under Zoning or Planning Law.

The Proposed Anguilla National Land Use Plan sets out the guidelines relied upon by the Planning Committee while the Anguilla Building Code is a guideline that applies to the design and construction of new buildings (alteration, demolition, relocation, reconstruction, etc), and provides recommendations with respect to waste disposal facilities and the minimum provision of water supply, etc.

The Planning Committee of the Department of Physical Planning guided by the National Land Use Plan is responsible for regulating the development and designated use of individual parcels of real estate. The submission to the Planning Committee is required to include details such as placement of the intended building and confirmation that no boundary covenants will be breached.

Once planning permission with respect to the use of the land is obtained, an application is made to the Building Board under the Building Act. The decision in relation to design, layout, construction, sanitation and drainage of the intended construction is made at this level.

Development of a new project will require the necessary licences/permissions as outlined. So long as the refurbishment does not include an addition to an existing structure that amounts to more than 25% of the square footage of the existing structure, no additional building permission may be required. It is, however, recommended that the department be consulted to ensure that the structural integrity of the building is not compromised by the refurbishment.

So long as there is no encroachment on the property of a third party, there should be no reason for an objection. However, if any citizen believes that the project may harm the environment or cause long or short-term devaluation of their property, they have the right to be heard.

There is a right of appeal against a relevant authority’s decision respecting an application for permission for development or the carrying on of a designated use. An aggrieved party has the right to appeal a decision.

A Memorandum of Understanding or similar document is usually entered into with the government. Such agreement usually includes a clause stating that the government will use its best endeavours to facilitate expeditious approvals under its control.

Agreements with utility suppliers would involve separate contracts between the developer/contractor and the utility supplier.

Restrictions on development and designated use are enforced through building inspections and notices by the Building Board under the umbrella of the Department of Physical Planning.

As at 19 April 2022, the Anguilla Companies Act (ABC) and the International Business Company Act (IBC) were repealed. Therefore, the only type of company that is now legally able to hold an interest in property is one governed by the Business Companies Act (BCA).

A foreign Limited Liability Company (LLC) such as a Delaware LLC can also hold title subject to government approval in relation to alien shareholders, if any, and registration as a foreign company under the BCA.

A foundation is considered by some investors to be a preferred vehicle.

There is no specific feature that the by-laws of a company formed to invest in real estate would contain. As is usual in companies, there will be mechanisms for approval of contracts and agreements, voting rights of investors, and so on.

REITs are not currently available as an investment vehicle in this jurisdiction.

The minimum capital required to set up each type of entity used to invest in real estate would be the value of one share.

The governance requirements will be set out in the legislation under which the entity is formed.

A company that holds an interest in property is required to ensure that all the statutory requirements are met. This includes the filing of an Annual Return and Economic Substance Return and complying with normal accounting principles. The costs associated with these requirements can vary, but they start at a minimum of USD800. Accounting compliance costs will vary based on the organisation that is performing this function.

Rental and lease agreements can be entered into, to occupy and use real estate for a limited period of time without buying it outright. Persons/entities rarely enter into licensing agreements.

Commercial lease agreements are dependent on the intended use of the properties and the terms agreed between the parties.

Rental and lease agreements are not regulated, save that if the lease term exceeds a period of two years the lease is required to be recorded in the Land Registry.

The following terms are typically included in a lease agreement for business premises, whether contractual or regulated:

• length of lease term;
• maintenance and repair of the real estate actually occupied by the tenant;
• frequency of rent payments;
• COVID-19 pandemic issues;
• the full description of the leased property;
• the purpose of the lease;
• insurance, determination, breach, nuisance and remedial and notice clause(s);
• permissions with respect to subleasing (if allowed); and
• the jurisdiction of the lease.

The rent payable will not necessarily remain the same as long as the lease lasts. There is usually a clause with respect to incremental/periodical/annual rental increase based on the duration of the lease (calculated using the CPI or by percentage/other).

The matter of rent increase is determined between the parties. However, if there is a disagreement regarding the amount of rent increase beyond any prior agreements, a party may refer to the limitations established in the Rent Restriction Act (Revised Statutes of Anguilla, Chapter R50). This act does not apply to furnished accommodations, building leases, or renewals or continuances of such leases for terms of 25 years or more.

Since 1 July 2022, Goods and Services Tax (GST) is payable on rental or Accommodation services provided for a period of 182 days or less.

Long-term rental (183 days or more) is exempt from GST.

If the lease is for a term exceeding two years, it is required to be recorded. In this event, stamp duties and registration fees will apply.

Declaration of Covenants Easements and Restrictions under which the register is created, as well as the Condominium/Home Owners Association and Unit Management Agreements, usually outline the obligations of owners in relation to the common areas of developments.

In a property occupied by multiple tenants, utilities and telecommunications costs are typically covered through Unit Management Agreements, and are prorated based on each unit’s square footage and the proportion of shared common areas. This method is used when individual units are not separately metered.

Usually the tenant is required to obtain insurance as one of the terms of a lease, with a requirement that a copy of such insurance be provided to the landlord. Recoveries are subject to the terms of the policy. The author is unaware of any instances of recoveries as a result of the COVID-19 pandemic.

Restrictions can be imposed by the landlord on how a tenant uses the real estate and the use of the property is usually a condition of the lease. There is no zoning statute in Anguilla.

The tenant is permitted to alter or improve the real estate. Typically, the lease agreement includes a clause stating that no structural alterations or modifications can be made without the prior consent of the landlord, and that such consent should not be unreasonably withheld.

Leases are governed by the Registered Land Act.

The landlord reserves the right to forfeit the lease where the tenant, as a company, goes into liquidation or, as an individual, becomes bankrupt.

Enforcement actions can be taken in the court.

A landlord usually ascertains that a prospective tenant is employed and requests a security payment equivalent to one or two months’ rent.

The agreement usually includes a termination clause. The landlord has the right of forfeiture whether expressed or implied in the lease, after giving notice to the tenant. Eviction proceedings can be commenced.

Such permission would first be required to be included in the initial lease agreement. Some agreements indicate that the tenant does not have the right to assign for a period (say ten years from the date of the initial lease); while others may include a clause where the tenant agrees not to assign or part with possession of the premises or any portion thereof without prior written consent and for which an adjustment of the rental rate will have to be agreed.

Landlords have the right to terminate a lease in the following circumstances:

• without cause within a stated period;
• for non-payment of rental after say 30 days after written demand; and
• for tenant’s failure to remedy breach after notice.

Either party may terminate after a specified period, such as 12 months, by giving, for example, no less than six months prior notice in writing, during which time the tenant should pay rent, and the landlord and tenant should perform and observe the covenants in the lease.

Tenants have the right to terminate a lease in the following circumstances:

• failure of the landlord to grant the tenant peaceful enjoyment of premises without any interruption or disturbance from the landlord or any person claiming through, under or in trust for the landlord;
• failure of landlord to maintain access to premises; and
• failure to carry out repairs, at all, or in accordance with terms of the lease.

The Registered Land Act includes other implied terms that apply to lease agreements, whether or not they are expressly included in any agreement executed between the parties.

Leases for a term of more than two years must be recorded. To effectuate the recording, the responsible party (usually the lessee) must execute and submit an instrument (Form RL 8 – Lease/Sublease) and an agreement, pay the relevant stamp duties and registration fees, and submit the instrument to the government for recording.

The stamp duty payable is calculated based on 0.05% of the value of the leased property for each year or part of a year of the lease term, up to a maximum of 5% of the value of the leased property. The registration fee is USD37.20.

A tenant can be evicted in the event of a default prior to the date originally agreed. A notice to quit giving 30 days from the date of service of the notice is usually issued. If the tenant does not leave the property after that time has passed, then an application can be made to the Magistrates’ Court. The process could take several months. There are no known eviction moratoriums.

While it is unprecedented for a lease agreement to be terminated by a third party, it is possible in certain circumstances, such as when the government claims the property for public purposes.

While there are no statutory limitations on damages that a landlord may claim, there is a limitation period of six years. Typically, landlords will request a cash security deposit equivalent to one or two months’ rent.

The most common structure used to price construction projects is the cost of the work (generally measured per square foot).

Usually a request for tender is made. Once the selection is made, the assignment of responsibility is a matter of contract.

An indemnification clause indicating that indemnification shall not be limited in any way by any limitation on the amount or type of damages, compensation or benefits payable by or for the contractor, and subcontractor, or sub-subcontractor, is usually included in the agreement.

Warranties are also included in the agreement.

A Contractor’s All Risk Insurance Policy and Workmen’s Compensation Policy are also required.

The devices are only limited by the terms of the agreement, so long as there is no contravention of the applicable statute, or policy.

In the schedule, tasks are assigned by creating a work/task schedule and creating a chart to measure progress.

Large investment projects would require performance bonds.

As most construction projects are conducted on a task-related staged payment basis with the funds being provided by the owner, whether directly or by loan, additional performance security is not required.

Contractors and/or designers are not permitted to lien or otherwise encumber a property in the event of non-payment; a claim is required to be filed.

Once the contractor issues a Certificate of Practical Completion, or a similar document, arrangements will be made for the Building Inspector to inspect the property to confirm that it is completed and fit for habitation or use for its intended purpose. An Occupancy Certificate is issued after inspection.

Gains from disposition of real property are not taxed.

There are no methods commonly used to mitigate transfer, recordation, stamp or other similar tax liability on acquisitions of large real estate portfolios.

Property taxes are payable by the proprietor of developed property whether or not it is occupied. There are no business rates and no exemptions.

Property taxes are not charged on undeveloped property (bare land).

There is no specific income tax withholding in Anguilla. However, under the Goods and Services Tax Act 2022, where a taxable person is providing goods or services to the government and is required to charge GST on those goods or services, the government may withhold such taxes that would be charged by the taxable person.

Effective 1 July 2022, goods and services tax becomes payable on short-term accommodation (rental) for a period not exceeding 182 days at a rate of 13%. This tax is collected by the proprietor from the occupier for payment to the Inland Revenue Department. Gains from disposition of real property are not taxed.

Exemption applies, upon the implementation of GST, to:

• a supply of:
1. a lease, licence, hire rental or other form of supply of accommodation, to the extent that it is a supply of the right to occupy or be accommodated in premises for 183 days or more; or
2. leasehold land by way of lease (not being a grant or sale of the lease of that land) to the extent that the subject land is used or is to be used for the principal purpose of accommodation in a residential dwelling erected or to be erected on that land, where the lease is for 183 days or more;
• a supply of the following immovable property:
1. vacant land; and
2. a residential dwelling that is:
1. resold by the initial purchaser including all subsequent sales of such property; and
2. sold by the first-time owner after two years of continuous occupancy of such premises by the owner or his immediate family;
• a lease, licence, hire rental of land to the extent that it is to be used for agricultural purposes; and
• a lease, licence, hire rental of land except for in vacant land, where the lease is for 183 days or more.

There are no tax benefits from owning real estate in Anguilla.