The Aliens Landholding Regulation Act (ALRA) of Anguilla
There is a view (which I share) that ALRA is obsolete, and unnecessarily holds up development in Anguilla. It ought to be repealed without delay, if the economy of Anguilla is to get a long overdue boost from dealings in real property.
ALRA was originally enacted by the Imperial Parliament in London in about the year 1914 to prohibit the German armed forces acquiring bases around the Empire. It was based on the California Alien Land Law of 1913, designed to prevent Mexicans purchasing property. After 1918, it was repealed everywhere in the British Empire except in the small islands of the West Indies which had neither the resources nor the initiative to repeal it.
As tourism grew in our islands in economic importance, and Ministers saw the opportunities opening up for extracting brown paper bags of money from ‘investors’ in exchange for granting licences, the argument was invented that the Act was needed to keep out undesirable foreigners. The truth is that such power existed under the Immigration Act. But, the Immigration Act did not offer as many opportunities for under-the-table deals as ALRA did.
ALRA was misused as a form of Planning Act. This was a misuse because foreigners could be compelled in exchange for a licence to follow arbitrary planning policies that did not apply to locals. Instead of passing into law a proper, modern Planning Act, which might prove to be unpopular, governments could put up a show of being concerned about the environment, and force foreigners to comply with standards that were often arbitrarily set, and frequently waived for the right consideration.
ALRA was misused as a tax-raising law. Foreigners would have to pay an extra 12.5% of the value of the property in addition to the 5% paid by locals. Not only was this bad for being essentially discriminatory, but it put off many decent investors who might have wanted to buy a holiday home and to hold on to it for a few years before reselling it. It made developed land difficult if not impossible to turn over at a profit. The result is that many valuable properties have been developed on the island that are now essentially unsellable. This is to the disadvantage of the public purse, which would welcome the stamp duty on a sale.
Of course, the ALRA tax provision was frequently waived by governments, no doubt for an acceptable private consideration. This was as a result of ALRA specifically providing that Executive Council may waive the payment of the tax. In my opinion, it would prove more profitable to government if ALRA was repealed and replaced by an increased tax on all land transfers under the Stamp Act. The Stamp Act tax is safe because it cannot legally be waived by Executive Council, and the revenue would thus be guaranteed.
The result is that ALRA performs none of its intended objects. It does not keep out Germans, who are not at war with us. It does not restrict any foreigner who is either willing to put up with the onerous and exceptional provisions that will apply only to his land ownership in Anguilla, or who is willing to pay for someone to front for him, or to pay some other consideration. It does not serve as a consistent or fair planning instrument. Nor, given the many notorious exceptions that are made by governments when they issue ALRA Licences, does the Act raise significant amount of revenue. The Act stands completely discredited as a fraud and an invitation to corruption. In my view, it should be repealed.
The repeal of this Act will not enable undesirable foreigners to buy up all the land in Anguilla, as some Anguillians fear, unless the government permits them to do it. They permit it by failing to enforce the Immigration Act, failing to prosecute Anguillians who front for foreigners in breach of the existing law, and failing to pass a modern Planning Act and modern Planning Regulations.