News and Insights
27 April 2022
Buying a home is the most expensive purchase most people make during their lifetime. With all the costs and expenses involved in buying a home every penny counts. Thankfully first-time buyers in Jersey can benefit from considerable savings when it comes to paying stamp duty or land transaction tax (LTT) – which is the tax payable when a person buys a new home.
The average first-time buyer in Jersey currently spends approximately £390,000 on a property. Normally this would incur a stamp duty or LTT (which is the equivalent for share transfer properties) of almost £6,000. However, for first-time buyers this figure reduces to a much more affordable £480.
Who qualifies as a first-time buyer?
A first-time buyer in Jersey is a person who has the necessary housing qualifications and has never owned, or part owned a house or flat in Jersey or anywhere else in the world – including through inheritance
First-time buyer stamp duty and LTT
Islanders trying to get on the property ladder for the first-time should be aware of the reduced stamp duty or LTT available to them.
The reduced rate is only available when they buy a property either by share transfer, flying freehold or freehold if the purchase price is less than £500,000. Purchases over £500,000 incur the standard stamp duty or LTT rate.
What else should first-time buyers be aware of?
Despite a threshold of up to £500,000, first time buyers wanting to save money should consider properties in the region of £450,000 or less as this could result in a saving of up to £7,000 in stamp duty or LTT. As a first-time buyer purchasing a property for £500,000, will incur stamp duty or LTT of £8,080 compared to £1,080 when buying a home for £450,000.
With house prices continuing to increase in Jersey it is reassuring to know that the first-time buyer threshold has also increased on a regular basis too.
Can a person qualify as a first-time buyer even if they already own property?
There are certain circumstances where a person might be considered a first-time buyer, even if they already own property. Although it is important to clarify that all the below examples whilst categorising someone as eligible for a designated first-time buyer home still incur the standard stamp duty or LTT rate:
- If someone owns a share transfer property, they may be able to buy a designated first-time buyer home if they sell their flat to anyone (not necessarily a first-time buyer) and buy a property larger than their current home.
- If a person owns a flying freehold property, they may be able to buy a designated freehold first time buyer home, provided they sell their flying freehold property to a first-time buyer and buy a property larger than their current home.
- If someone owns land, for example inherited agricultural land or joint inheritance with siblings of family property, their circumstances are considered individually by the Housing Minister; and
- Similarly, if a person has owned property that was once owned by a spouse or ex-spouse, their circumstances are considered individually by the Housing Minister.
For advice and guidance on buying property in Jersey including buying for the first time please contact the Viberts Property team.
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