Skip to main content Skip to accessibility
This website is not compatible with your web browser. You should install a newer browser. If you live in Jersey and need help upgrading call the States of Jersey web team on 440099.
Government of Jerseygov.je

Information and public services for the Island of Jersey

L'înformâtion et les sèrvices publyis pouor I'Île dé Jèrri

Budget 2012 - Draft: Amendment: Stamp Duty and Land Transaction Tax for First-Time Buyers and Stamp Duty Court Fees

A formal published “Ministerial Decision” is required as a record of the decision of a Minister (or an Assistant Minister where they have delegated authority) as they exercise their responsibilities and powers.

Ministers are elected by the States Assembly and have legal responsibilities and powers as “corporation sole” under the States of Jersey Law 2005 by virtue of their office and in their areas of responsibility, including entering into agreements, and under any legislation conferring on them powers.

An accurate record of “Ministerial Decisions” is vital to effective governance, including:

  • demonstrating that good governance, and clear lines of accountability and authority, are in place around decisions-making – including the reasons and basis on which a decision is made, and the action required to implement a decision

  • providing a record of decisions and actions that will be available for examination by States Members, and Panels and Committees of the States Assembly; the public, organisations, and the media; and as a historical record and point of reference for the conduct of public affairs

Ministers are individually accountable to the States Assembly, including for the actions of the departments and agencies which discharge their responsibilities.

The Freedom of Information Law (Jersey) Law 2011 is used as a guide when determining what information is be published. While there is a presumption toward publication to support of transparency and accountability, detailed information may not be published if, for example, it would constitute a breach of data protection, or disclosure would prejudice commercial interest.

A decision made 1 November 2011:

Decision Reference:  MD-TR-2011-0133

Decision Summary Title:

Draft 2012 Budget – Proposed Amendments – Stamp Duty and Land Transaction Tax for first-time buyers and Stamp Duty Court Fees

Date of Decision Summary:

31 October 2011

Decision Summary Author:

Director – Tax Policy

Decision Summary:

Public or Exempt?

Public

 

Type of Report:

Oral or Written?

Written

Person Giving

Oral Report:

N/A

Written Report

Title:

Draft 2012 Budget – Proposed Amendments – Stamp Duty and Land Transaction Tax for first-time buyers and Stamp Duty Court Fees

Date of Written Report:

31 October 2011

Written Report Author:

Director – Tax Policy

Written Report :

Public or Exempt?

Public

Subject:

Draft 2012 Budget – Proposed Amendments – Stamp Duty and Land Transaction Tax for first-time buyers and Stamp Duty Court Fees.

Decision(s):

The Minister for Treasury and Resources decided to amend the stamp duty revenues estimated for 2012 in Summary Table A of the Draft Budget 2012 (P.159/2011) and also to instruct the Law Draftsman to draft amendments to the Draft Finance (2012 Budget) (Jersey) Law regarding:

 

  1. Reducing the rate of Stamp Duty and Land Transactions Tax charged to first-time buyers of properties with a purchase price of between £400,000 and £450,000 for a period of 12 months only; and
  2. The Stamp Duty Court Fees charged on actions to recover debts.

 

Reason(s) for Decision:

  1. To help to stimulate the first-time buyer housing market.

2.  To ensure that individuals who are already overburdened with financial worries do not suffer additional hardship as a result of an increase in court fees.

Resource Implications:  

There are no manpower implications.  The maximum estimated revenues foregone from both measures are £202,000, of which the majority will be incurred in 2012.

Action required:

Greffier of the States to be requested to lodge the attached Amendment in the States at the earliest opportunity and to instruct the Law Draftsman to draft amendments to the draft Finance (2012 Budget) (Jersey) Law regarding:

 

  1. Reducing the rate of Stamp Duty and Land Transactions Tax charged to first-time buyers of properties with a purchase price of between £400,000 and £450,000 for a period of 12 months only; and
  2. The Stamp Duty Court Fees charged on actions to recover debts.

 

Signature:

 

 

 

 

Position: Senator P F C Ozouf, Minister for Treasury and Resources

Date Signed:

 

Date of Decision:

 

Hide report
Budget 2012 - Draft: Amendment: Stamp Duty and Land Transaction Tax for First-Time Buyers and Stamp Duty Court Fees

 - 1 -

Treasury and Resources

Ministerial Decision Report

 

 

 

Draft 2012 Budget – Proposed Amendments – Stamp Duty and Land Transaction Tax for first-time buyers and Stamp Duty Court Fees

 

  1. Purpose of Report

 

The purpose of this report is to request that the Minister for Treasury and Resources (“the Minister”) should amend the stamp duty revenues estimated for 2012 in Summary Table A of the Draft Budget 2012 (P.159/2011) and also to instruct the Law Draftsman to draft amendments to the draft Finance (2012 Budget) (Jersey) Law regarding:

 

  1. Reducing the rate of Stamp Duty and Land Transactions Tax charged to first-time buyers of properties with a purchase price of between £400,000 and £450,000 for a period of 12 months only; and

 

  1. The Stamp Duty Court Fees charged on actions to recover debts in the Petty Debts Court.

 

 

Stamp Duty and Land Transaction Tax for first-time buyers

 

  1. Background

Amongst other things, Stamp Duty is charged on transactions involving land, and on the registration of charges associated with land.  Land Transactions Tax imposes similar charges on transactions in the shares of companies which own residential dwelling accommodation.

 

First-time buyers are currently eligible for relief for Stamp Duty and Land Transactions Tax in respect of transactions regarding dwelling accommodation up to a maximum of £400,000.  Above that point, duty or tax is charged at the standard rates applied to all transactions.  The average price paid by a first-time buyer for a house is £431,000, based on the most recent data provided by the States of Jersey Statistics Unit.

 

  1. Proposal

The housing market in Jersey has been depressed for the past three and a half years, with the number of transactions undertaken in each of 2008, 2009 and 2010 approximately 25% lower than the long-term average seen before 2008.  This lack of movement in the housing market has had a knock-on effect on the broader economy, affecting estate agents, lawyers, removal firms and tradesmen.

 

First-time buyers are finding it particularly difficult to make their first purchases as lending institutions now require much higher deposits than previously.  Deposits of 15% are now commonly required.  In this environment, Stamp Duty/Land Transaction Tax is another factor which makes it more difficult for first-time buyers to get on the housing market.

 

In order to help to stimulate the market, and to make it easier for first-time buyers to acquire their first home, it is proposed to increase the ceiling up to which first time buyers are eligible for relief from Stamp Duty/Land Transactions Tax from £400,000 to £450,000.  This represents relief of up to £6,500 for eligible individuals.

 

Relief will also be extended to include taxes payable on charges registered against properties of up to £450,000 for first-time buyers.  This represents further additional relief of up to £1,875 per person.

 

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, it is proposed that the increase should be a temporary one, and should apply for a period of 12 months from 1 December 2011. The impact on the housing market will be kept under review and considered again at the time of the 2013 Budget.

 

  1. Recommendation

It is recommended that the Minister for Treasury and Resources (“the Minister”) should:

i. Amend the stamp duty revenues estimated for 2012 in Summary Table A of the Draft Budget 2012 (P.159/2011) from £24,231,000 to £24,031,000 and amend the total taxation revenue figure shown in the same table from £574,778,000 to £574,578,000 ;

 

ii. Instruct the Law Draftsman to make the necessary changes to the Stamp Duties and Fees (Jersey) Law 1998 and the Taxation (Land Transactions) (Jersey) Law 2009 in order to reduce the rate of Stamp Duty and Land Transactions Tax charged to first-time buyers of properties with a purchase price of between £400,000 and £450,000 for a period of 12 months only.

 

  1. Reason for Decision

In order to act as a temporary stimulus to the housing market, and to make it easier for first-time buyers to purchase their first property.

 

  1. Resource Implications

There are no manpower implications.  The maximum estimated revenues foregone are £200,000, of which the majority will be incurred in 2012.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stamp Duty Court Fees

 

  1. Background

In the 2012 Budget proposal, the Treasury and Resources Minister proposed to increase court fees under the Stamp Duties and Fees and the Land Transaction Laws.  One of the proposed changes relates to actions in the Petty Debts Court.

 

  1. Proposal

The current fee for actions in the Petty Debt Court where claims do not exceed £100 is £7. The proposal in the 2012 Budget was to increase this to £15 (Rate B). However there is some concern that such an increase may cause additional financial hardship to individuals who are already overburdened with financial worries.  Therefore the Minister has decided to keep this fee at £7.

 

  1. Recommendation

It is recommended that the Minister for Treasury and Resources (“the Minister”) should:

i. Amend the stamp duty revenues estimated for 2012 in Summary Table A of the Draft Budget 2012 (P.159/2011) from £24,231,000 to £24,229,000 and amend the total taxation revenue figure shown in the same table from £574,778,000 to £574,776,000;

 

ii. Instruct the Law Draftsman to prepare amendments to the draft Finance (2012 Budget) (Jersey) Law (P.160/2011), making the necessary changes to the Stamp Duties and Fees (Jersey) Law 1998 in order to for the fee relating to actions in the Petty Debts Court  where the claim does not exceed £100 to remain at £7.

 

  1.           Reason for Decision

To ensure that individuals who are already overburdened with financial worries do not suffer additional hardship as a result of an increase in court fees.

 

  1.           Resource Implications

There are no manpower implications. The estimated revenue foregone from the original proposals is less than £2,000 per year.

 

 

 

 

Report author : Director of Tax Policy

Document date : 31/10/11

Quality Assurance / Review : Head of Decision Support

File name and path: L:\Treasury\Sections\Corporate Finance\Ministerial Decisions\DSs, WRs and SDs\2011-0133 - Draft 2012 Budget – Proposed Amendments Stamp Duty LTT - WM\WR - Draft 2012 Budget – Proposed Amendments Stamp Duty LTT - WM.doc

MD sponsor : Treasurer of the States

 

Our sites
Back to top
rating button