Sark seeks to slash property tax on local market homes

Sark’s Chief Pleas could cut the rate of property transfer tax on local market properties to “support local buyers”.

Policy & Finance will ask the island’s parliament to cut the tax from 7.5% to 4% at its meeting on 1 October.

Currently all properties – open and local market – are subject to a flat rate which is charged when property is sold.

But Conseiller John Guille, Chair of Policy & Finance, said this should be cut for local properties “to support local buyers and sellers by making property transactions more accessible within the local market.”

If approved, the different rates will be drawn up by Guernsey Law Officers, and new legislation will have to be presented to Chief Pleas again.

Open market homes would still be subject to a transfer tax of 7.5% after sale.

Chief Pleas identified a loophole with the tax last year which allowed companies owning real estate to avoid paying the transfer fee without updating the central property register after a sale.

It was formally raised by Policy & Finance saying all property owners would be subject to some form of taxation if transactions take place.

Other taxes have been considered to prevent losses of revenue from the tiny tax net cast by the government.

This includes an annual tax on homes levied on companies which own residential property over a certain value.

Chief Pleas’ revenue from its 2024 budget brought in £1.8m.