13 March, 2007

Selling Land

Selling Land.

This post is a follow-on from the one posted yesterday. The second problem relating to land in Anguilla has to do with the refusal of Anguillians to lease their land. We all know that it is better for our families and descendents if we lease rather than sell. There will be something coming back in a few years time. Everyone is selling, no one is leasing. What to do?

Anguillians have to be persuaded to lease their land. How to do it? Especially when everyone keeps saying that no foreigner wants to take a leasehold interest, they all want to buy. It is not true, of course. It is just what everyone says.

First, government can introduce a heavy tax on the purchase price of land that is sold. Make the seller pay a 15% stamp duty. At the moment only the purchaser pays, and then only a 5% stamp duty. Keep the stamp duty for purchasers, but increase it. Make it higher, much higher. Let leases continue to be free of tax to the landlord. A 15% tax on sellers will be a deterrent.

Second, government can mount a campaign to persuade Anguillians to stop selling land. It is a matter of education. It does not take much. If no land was selling in Anguilla, those foreigners who want a piece of the Rock will soon become accustomed to leasehold interests. If all a foreigner can get is a 15 or a 25 year lease, then that is what will be available. The problem only arises if exceptions are made for a favoured few.

Third, as part of the education campaign, Anguillians can soon become aware that a lease can be as good as a sale when it comes to raising money from the lease of land. We don’t have to lease or rent for monthly or annual payments. We can negotiate for all the lease money to be paid up front. That way, we get the full value on the day the lease is signed so we can use the money as we want. A lawyer can easily prepare a lease that so provides.

As part of the education campaign, we have to stop talking about leasing, since it is so unpopular. As everyone wants to sell, we have to learn to start talking about selling a 10 year lease, or selling a 20 year lease. If you go to London today and you want to buy a flat in Mayfair or in Marble Arch it will cost you a good sum of money. Those are choice areas. Just like Anguilla is. When you buy such a flat, you are paying not less than ₤5 million for a three bedroom flat. And, you are not getting any freehold. You are not getting more than 15 years. Better learn to like it. There is no flat for sale in Marble Arch or Mayfair for more than 15 years. And, none is for less than ₤5 million. There are families in London that have been selling the same flats for two hundred years, and they still own the freehold. They consider us the height of idiots for selling the freehold. They laugh at us. We deserve it.

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