Are you a first time buyer?
In Jersey, a first time buyer is defined as a person who has housing qualifications AND has never owned, nor had an interest in, a house or flat in Jersey, or elsewhere.
A first time buyer can purchase by share transfer, flying freehold and freehold and, assuming the value of the property is less than £400,000, is entitled to pay greatly reduced stamp duty if it's a freehold or flying freehold purchase, or land transaction tax (in the case of share transfer) on the purchase and associated loan.
It's worth noting that the threshold increases to a value of £450,000 from 1 December 2011, for a year only.
For example, if you're a first time buyer then a purchase for £299,000 with a £250,000 loan would currently attract stamp duty or land transaction tax of £60 (£80 from 1 January 2012) for the purchase and a further £60 (£80 from 1 January 2012) for the borrowing. A non-first time buyer buying the same property would pay £3,750 on the purchase and a further £1,310 on the loan registration.
You only qualify for the first time buyer stamp duty reductions once, but you can qualify as a first time buyer in certain other circumstances, for instance:
- If you buy a flying freehold flat but wish to purchase a house in a designated "first time buyer" housing development such as La Providence. As long as you sell your flat to another first time buyer, you can purchase the house BUT you are not entitled to any reductions in stamp duty
- If you buy a share transfer flat but wish to purchase a house in a designated "first time buyer" housing development as described above then you may qualify even if you don't sell your flat to another first time buyer
- If the Housing Minister uses his discretion to allocate first time buyer status to people who may have owned land, perhaps by inheritance, providing that the land does not include residential accommodation
- If the Housing Minister uses his discretion to allocate first time buyer status to a person who was married to, or in a relationship with, a person who did own property and it could therefore be argued that they may have had an interest in that property
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.