Built in the late eighteen hundreds the house was built as a typical  balay bato, an architectural style prevalent in the Philippines during the Spanish Era. The house was owned by Natividad Sitchon Palacios, an  aunt of Tan Juan.  In 1906, Juan Anacleto Araneta acquired and occupied the house as he wanted to live within the poblacion for the remainder of his life, without delay he moved in his large family and the place became a microcosm of social and political life. It was the center of the towns activity specially on November 5 each year when he celebrated the anniversary of the revolution. On October 3, 1924 General Juan Anacleto Araneta passed away in his room.  The family continued to live in the house until after the World War II.

The house then became a high school, office for the engineering and the irrigation until the late 60ís when the family donated the house to the city who in turn donated it to the National Historical Institute and together with the city renovated the house.

Today the house is manage and maintained by the city having reacquired it from the Historical Institute. In 1996 it opened the house to the public as a lifestyle museum. Today it has been transformed into a community museum housing the rich socio- cultural heritage of the people of Bago City.