Minister resists calls to pause stamp duty tax

Islanders who buy homes they do not intend to live in currently pay an extra 3% in tax on top of stamp duty

Estate agents are calling for ministers to introduce a stamp duty surcharge holiday, rather than the short-term reduction proposed in the latest Government of Jersey budget.

People who buy homes they do not intend to live in currently pay an extra 3% in tax on top of stamp duty, but the government proposed it be lowered to 2%.

The surcharge was introduced in January 2023 to curb excess demand in the housing market, which has since slowed down, Statistics Jersey figures showed.

Jersey Estate Agents Association and building firm Ashbe Construction want the surcharge to be scrapped for at least six months to boost the economy, but Housing Minister Sam Mézec said first time buyers should be prioritised.

The latest Statistics Jersey figures showed on a rolling four-quarter basis, prices remained 14% below the peak, which was recorded in the third quarter of 2022.

Jersey Estate Agents Association president John Quemard said the stamp duty surcharge was "almost like the final nail in the coffin".

"When the island is struggling economically, the government really needs to do something to help assist, so this is just really dampening those efforts," he said.

Ashbe Construction managing director Ben Cairney said a stamp duty holiday would be more beneficial to the economy than a 1% reduction.

"If they gave a stamp duty holiday, and actually looked at the additional income from that holiday, and the amount of transactions that then go through in comparison to a similar period of time when the 3% was in, they would see where they should actually direct their focus in the future," he said.

Housing affordability

Mézec resisted calls to introduce a stamp duty surcharge holiday and said the "priority ought to be first time buyers or down-sizers or people looking to move within the market, rather than more buy-to-let investors".

Deputy Max Andrews, who earlier this year unsuccessfully proposed an increase in the surcharge from 3% to 5%, said he "fundamentally disagreed" with the budget proposal to cut it.

"There are many people who are living in the rental sector - they have aspirations to become home owners, but unfortunately they cannot afford property in the island," he said.

The proposal is due to be debated as part of the government budget in December.