01 November 2011
The Treasury and Resources Minister is proposing to extend the relief on stamp duty for first-time buyers.
At the moment, first-time buyers are eligible for relief on stamp duty and land transactions tax for homes costing up to £400,000. Above that point, duty is charged at the standard rates. The most recent data shows the average price paid by a first-time buyer for a house is £431,000.
Senator Philip Ozouf is proposing to increase the ceiling from £400,000 to £450,000. This represents relief of up to £6,500 for eligible individuals. Relief would also include taxes payable on charges for properties of up to £450,000 for first-time buyers. This represents further additional relief of up to £1,875 per transaction.
Senator Ozouf says he is responding to the difficulties faced by first time buyers during the current economic situation. “It is important that we do all we can to encourage first-time buyers into the market. In the last 3 years Jersey’s housing market has seen around a 25% reduction in the annual number of transactions. This has had a knock-on effect on the broader economy, affecting estate agents, lawyers, removal firms and trades people.
“First time buyers are finding it particularly difficult as lending institutions now require much higher deposits than previously. The Fiscal Policy Panel has advised that Jersey’s finances are finely balanced, and counsels against taking actions now which would permanently reduce Jersey’s future tax revenues. With that in mind, this proposal is for a temporary increase in relief, for 12 months from 1 December 2011.
“We have estimated that this will cost the Treasury in the region of £200,000. Its impact on the housing market will be kept under review and considered again in the 2013 Budget,” he said.
Senator Ozouf is also proposing to amend a Budget proposal to increase court fees for actions in the Petty Debts Court.
The current fee for claims up to £100 is £7. The proposal in the 2012 Budget was to increase this to £15. Senator Ozouf is proposing that this fee should remain at £7. He said “I have listened to the Citizens Advice Bureau and others, who are concerned that such an increase could cause additional hardship to people already facing financial worries. Keeping the fees at their current level would ease the way for those people who are least able to afford increased costs.”