The States of Jersey recently approved the 2015 Budget which
contains some important changes in relation to stamp duty and Land
Transaction Tax (LTT) (the equivalent tax for
"share transfer" property transactions). There will be
winners and losers as a result of the changes, which take effect
from 1 January 2015 and are being introduced against the backdrop
of the current general review of Jersey property taxation.
Reductions for Lower Value Mortgages
Those who will benefit the most will be persons borrowing to
finance the purchase of a residential property for £400,000
or less. Instead of the standard stamp duty or LTT of 0.5% of the
amount secured, they will pay nothing on the first £300,000
secured on the property and 0.25% on the balance up to
First-time buyers currently enjoy concessionary stamp duty/LTT
provided the value of the property does not exceed £450,000.
This threshold is to be reduced to £400,000 but there is to
be a sliding scale for the calculation of stamp duty/LTT where the
value of the property being purchased is more than £400,000
but does not exceed £450,000.
Increases for Higher Value Residential Properties
The biggest losers will be purchasers of residential properties
costing more than £1,000,000, with the introduction of new
percentage rates including a top rate of 7% for any amount over
£3,000,000. The following tables show the existing rates and
the new rates:
Commercial and Mixed Properties
The increased rates were originally going to apply to commercial
properties as well. However, following receipt of representations
regarding the potential impact on the local commercial property
market, the Treasury Minister brought an amendment prior to the
States debate for the purpose of restricting the new rates to
residential properties. There will, though, be grey areas. The
legislation uses the phrase "land on which a dwelling is, or
is to be, constructed", which would on the face of it include
mixed residential and commercial properties. It appears that it
will be necessary, where mixed properties are involved, to agree
the stamp duty treatment with the Registrar of Deeds on a case by
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.
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