Dr. Ellis Webster
The Anguilla Progressive Movement Government has resurrected, and will implement, a 2002 dormant provision which is now an additional source of revenue. It is the Resort Residence Annual Levy Act which was passed in the House of Assembly on Tuesday, April 20. And Premier Dr. Ellis Lorenzo Webster, the Minister of Finance, says that hoteliers were aware of it.
The legislation, which received its second and third readings and passed, was introduced by the Minister of Economic Development, Mr. Kyle Hodge. The Act provides for the imposition of a levy on real estate luxury products purchased from a developer – or subsequently resold by a purchaser. The new provision will be included in the Inland Revenue Department’s list of tax legislation.
Among other matters, the rate of the levy is five US dollars per square-foot where the luxury real estate product is included in the room rental programme. The rate is six dollars and fifty cents US per-square foot if it is not included.
Minister Kyle Hodge commented: “This Resort Residence Levy Act is specific to tourism products. It is specific to residential components of hotels. As the Premier said, from around 2002 Government reduced the Alien Landholding Licence from twelve and-a-half percent and, in some instances, to two percent – a ten percent reduction; and in some instances, three percent. It was a reduction of significance …It [the levy] was negotiated between investors, developers and the Government of the day to come up with something to replace the revenue that would be lost from the upfront sale.”
The Minister further stated: “Madam Speaker, if an investor or a developer or purchaser of a luxury product, would opt to pay the full twelve-and-a-half Landholding Licence, and the five percent stamp duty, which is
automatic, making it seventeen-and-a-half percent, then there would be no need to pay the annual levy for that residence.”
Commenting on the levy, Premier Dr. Ellis Lorenzo Webster said: “Hoteliers have known about this – and that it was coming. Some of them have even prepared for it and have told the persons, buying their properties, that this was an Act that would come into effect. I think it is time that this is brought into the House for consideration – and hopefully will be passed…I commend the Minister for having found this which was recommended since 2002, but was not brought to the House for this length of time.”
