Jersey’s housing market is coming under ever-greater strain. Now estate agents and industry leaders are urging the government to follow suit by introducing a temporary stamp duty holiday. The existing 3% non-resident investor surcharge on foreign property purchases has been set-up for failure and criticism. Others say it’s a drag on economic recovery.
John Quemard, president of the Jersey Estate Agents Association, voiced his concerns, stating that the surcharge felt “almost like the final nail in the coffin.” He contended that the government needed to step in to jumpstart the housing market in times of great economic distress. Only then can we make sure that progress doesn’t start to backtrack.
In January 2023, the federal government proposed this surcharge. This new program was intended to reduce excessive demand in the already overheated housing market. Recent figures released by Statistics Jersey shed light on a progressively slowing market. Property prices across the country are currently 14% under their peak reached during the third quarter of 2022.
In reaction to calls for relief, the government announced a reduction of the surcharge down to 2% from 3%. However, repeatedly, when asked, most estate agents feel this bandage fix is not enough. Instead, they call for a full-scale holiday on stamp duty.
Deputy Max Andrews, who in 2019 unsuccessfully sought to increase the surcharge from 3% to 5%. As of now, he says he is opposed to the government’s most recent offer. He said we need development that attracts first-time buyers and families to upsize as well as creating opportunities for seniors to downsize. We need to stop prioritising buy-to-let investors.
Ben Cairney, another industry commentator, underlined the possible impact of a time-limited stamp duty holiday. He proposed that the government study the additional revenue they collect during peak holiday times to determine if these shifts can be accommodated. By analyzing this against periods when the surcharge was active, they may reconsider their approach.
“When the island is struggling economically, the government really needs to do something to help assist, so this is just really dampening those efforts.” – John Quemard
As these discussions have developed, Deputy Sam Mézec has stood stoutly against proposals to provide a stamp duty surcharge holiday. He wants to make first-time buyers the highest priority. Moreover, he believes that people seeking to enter the market should be a greater priority than helping create even more investment properties.
The proposal to reduce the stamp duty surcharge will be debated by the UK Government in December. We hope this conversation will happen during the legislative budget process. As the housing market slows and the push for deeper reform intensifies, observers from all sides are HUNGARY-ing to see what emerges from these talks.
