Stamp duty relief not yet on the table for "right-sizers"

Tuesday 28 May 2024

A stamp duty relief scheme is not being included as part of a new policy for encouraging and incentivising islanders to "right-size" into smaller properties, the Housing Minister has revealed.

However, Deputy Sam Mézec's new Right-sizing Policy said he would work with Treasury Minister Elaine Millar "to consider fiscal incentives in the future".

The concept of right-sizing, in which someone moves into a new home that can better meet the requirements of their household – one that is the "right-size" for their needs – has gained prominence in recent years alongside political debate over Jersey's housing crisis.

Pictured: Housing Minister Sam Mézec will be looking at potential "fiscal incentives" to encourage right-sizing, according to his new policy.

In 2021, then-Housing Minister Russell Labey considered support for right-sizing among the measures in his Creating Better Homes plan.

At the time, Deputy Labey said that supporting homeowners who wished to move to smaller, more suitable properties could help increase the supply of larger houses for families who needed them.

And in a report accompanying an amendment to the Government Plan that called for the development of "a scheme to encourage and incentivise right-sizing", St Helier Deputy Tom Coles noted that data included in the 2021 Census indicated that 44.1% of all owner-occupied homes are under-occupied.

According to Deputy Mézec's new policy, the percentage of "downsizing" transactions has remained at around 30% since 2018, despite the overall drop in houses being sold last year.

Pictured: A breakdown of "right-sizing" transactions to smaller properties since 2018.

The policy lists several ways that this could be increased, including: 

• Supporting the development of "new and desirable homes" on rezoned housing sites across the country parishes, suitable for "those who wish to downsize within their community".
• Creating an obligation for social housing providers to provide support to under-occupying tenants, by "helping them to move into homes they can afford and will be happy in".
• Providing advice and support to those looking to right-size through the Government’s Housing Advice Service.
• Encourage and support the States of Jersey Development Company to provide suitable rightsizing support packages on new developments, including South Hill.

The report also noted that the cost of fees and stamp duty has been cited as "a potential barrier" for those looking to right-size into smaller homes.

It explained: "Particularly for people who have owned their property for a long time, it is likely that equity will be released upon the sale of the larger home and the payment of stamp duty on the new smaller property will reduce the amount of capital realised once the transaction is complete."

Pictured: The percentage of "downsizing" transactions has remained at around 30% since 2018.

It also said that Deputy Mézec "has been interested in developing a stamp duty relief option" to support right-sizing, noting that the responsibility for tax policy rests with Treasury Minister Elaine Millar.

However, the document added that: "Due to the complexity of legislative changes that would be required to deliver a stamp duty relief, the difficulty of ensuring this is appropriately targeted, and an inability to quantify any potential loss in revenue, stamp duty relief is not being offered as part of this policy.

"The Minister for Housing will seek to work with the Minister for Treasury and Resources to consider fiscal incentives in the future."

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