New tax to end housing 'loophole'

Land Transaction Tax is expected to make the States �1m a year

People who buy share transfer properties in Jersey will have to pay a new tax if the treasury minister's plans are agreed.

The States is being asked to approve new regulations which would bring in Land Transaction Tax.

The tax was agreed in principle by politicians last year.

The move would result in those buying a share transfer property, usually flats, paying the same amount in the new tax as a freehold buyer pays in stamp duty.

Under old common law in Jersey when people bought a property they owned it "from the centre of the earth to the heavens".

When share transfers were introduced, people were able to buy a share in companies that owned entire blocks of properties, and as part of that share they acquired their flat.

Treasury Minister Philip Ozouf said land transaction tax would close an unfair loophole for share transfer property buyers, who currently do not pay any tax when purchasing homes.

"You could say the public purse has not been properly collecting stamp duty from share transfer property.

"There has been an increasing move by developers to put more and more properties through share transfer arrangements and therefore depriving the exchequer of money and therefore depriving our ability to fund nurses, etc," he said.

The tax is expected to raise about £1m a year.

The stamp duty discounts that apply to first time buyers of freehold property would also apply to discounts on land transaction tax for first time buyers of share transfer property, the minister said.