Stamp duty uplift introduced on the purchase of second homes in Jersey

The 2023 Budget introduced changes to the Stamp Duty law, the Land Transition Tax (LTT) law, and the Enveloped Property Transaction Tax (EPTT) law.

From 1 January 2023, buyers who purchase a property that is not to be their main residence, generally a second home or a buy to let, must pay a three per cent uplift in stamp duty (or LTT, the stamp duty equivalent for share transfer).

Under the old rates, stamp duty/LTT on a £700,000 house or apartment would have been £14,000, regardless of whether it was to be the buyer's main residence. Following these latest changes, in the instance that the property is not the main residence, then stamp duty/LTT would be £35,000.

No exemptions were made for transactions to which buyers were already committed. In the case of the Horizon development, delays in completion of the construction works led to buyers who had been locked into their purchases for several years facing an unforeseen hike in their purchase costs.

In order to 'police' this increase, every residential purchase must now include a statement in prescribed terms from the buyer as to whether the property is a dwelling acquired for use as their main residence.

The draft legislation commented that "it is suggested that the measure could modestly increase revenue and stimulate additional purchases by owner-occupiers." The increase in revenue is a given but only time will tell whether this measure will have the desired positive impact on the local buyer and rental market.