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Property tax grab proposed for overseas owners

Property tax grab proposed for overseas owners

Wednesday 30 November 2022

Property tax grab proposed for overseas owners

Wednesday 30 November 2022

Overseas residents who own local property could be forced to pay 50% of the proceeds from any future sale in tax, in a move designed to free up homes for Islanders.

In an amendment to the Government Plan, Deputy Steve Luce is calling for the introduction of a Residential Land Withholding Tax which would, if approved, come into force at the beginning of 2024.

The scheme would see the tax introduced at a rate of 30% on the gross sale proceeds of offshore property holders on 1 January 2024, before being upped to 50% from 1 January 2025.

However, Deputy Luce believes that this move would incentivise overseas homeowners to sell before the tax comes into force and "leave the Jersey property market," thereby freeing up homes for Islanders.

He said: "Payment of RWLT can be avoided altogether if property is sold before 31 December 2023 with the lead-in time intended to encourage non-resident investors to divest themselves of their Jersey property sooner rather than later.

"RLWT will, therefore, effectively act as a deterrent for non-resident investors to continue to own residential properties in Jersey.

"There is undoubtedly a shortage of residential property for Islanders to purchase which is, in part, caused by non-resident investors owning residential share transfer properties."

Steve Luce JEP.jpg

Pictured: Deputy Steve Luce wants overseas property investors to pay a 50% tax (Jersey Evening Post)

Deputy Luce admitted that the scale of properties owned by non-Jersey residents is 'unknown' as a 2020 proposition to address this 'lack of information' has not been fully enacted.

In 2020, the States Assembly approved a proposition from former Deputy Mike Higgins which requested a digital register of ownership for all residential and commercial properties by the end of 2021. However, this has still not been established.

Deputy Luce added: "Incentivising non-resident owners to leave Jersey’s housing market by the introduction of RLWT will result in a much-needed boost to the supply of share transfer properties as those owned by non-residents become available. This will go some way to towards meeting the demand by local first-time buyers."

The Government Plan is due to be debated at the States sitting beginning on the week of Monday 12 December.

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Posted by Sarah Simon on
Have those in charge seriously thought this through? The extremely wealthy probably won't sell ever if the tax is brought in. The prestige of owning property in Jersey will just be kept for the owner and their family indefinitely, discouraging them to ever sell because of this tax but rent out the property instead because rentals and airbnb's make a fortune or be left empty except for the owners two week holiday here.
Then you have some owners that will definitely wish to sell before the tax is introduced. How many local people can actually afford to buy a house here with mortgages being denied at present due to external policy and global recession, to apparently continue throughout 2023? this article States Gov have no idea how many properties are owned non residentially. You could end up with the wealthiest or the likes of Andium Homes, Dandara and Gov of Jersey's prop portfolio buying up everything. Great for Government on all fronts, injection of stamp duty, etc..... but what about the real people of our island, does this tax really help anyone. ????
Posted by Peter Townend on
So when are the States going to reverse Mr Gorse’s approval for 11k or whatever they are to buy more than one property in Jersey? Should never have been allowed in the first place - if you want to keep properties for local residents.
Posted by Martin on
EXCELLENT idea as overseas countries do the same to us!
Posted by Philip Flynn on
This proposal is an attack on property rights and would seriously damage Jersey's international reputation. This is Jersey not Zimbabwe.
Posted by john garner on
Ah the thin end of the wedge for capital gains in Jersey ...
Posted by Private Individual on
Luce has been a deputy for 10 years, why hasn't he brought a proposition until now? They should have stopped people from buying property from outside island years ago and stopped the rampant immigration over the past 10 years. All of which deputy luce was a party to.
Posted by BrianFrith76 on
50% is expropriation and will seriously damage Jersey’s reputation. This is a particularly ridiculous proposal as the government do not even know how many properties fall into this category and their value very likely out of the reach of first time buyers. While ever we continue to believe that the housing crisis can be solved by these sort of measures rather than the government using its own land and buildings and financial resources to offer truly affordable dwellings then we will get absolutely nowhere.
Posted by john garner on
Ah the thin end of the wedge for capital gains in Jersey ...
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