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."

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.