Guernsey To Update Tax Laws On Real Property

by Jason Gorringe, Tax-News.com, London

15 March 2006

The government of Guernsey is seeking to introduce new legislation overhauling the jurisdiction's taxation on real property which it argues has become increasingly outmoded.

The Treasury and Resources Department, which became responsible for the Cadastre Committee following the reorganisation of government, placed a report before the States in July 2005 recommending the fundamental review of the Cadastre and Tax on Rateable Values systems.

Following research carried out during the last six months, the department has prepared a report that will be discussed at the March 2006 States meeting that seeks approval for the high level principles by which it is proposed that the future system will be administered.

The legislation supporting Guernsey’s Cadastre system dates back to 1947 and the Law governing the charges to be applied against property were most recently substantially revised in 1976.

"Over the almost sixty years since the current Cadstre Law came into effect the nature of land use and built environment development in the Bailiwick have changed tremendously", says T&R Minister, Deputy Lyndon Trott, "and the current system was long overdue for review", he added.

"In both the recent consultation documents on Guernsey’s Future Economic and Taxation Strategy, the TRV system was identified as a means by which additional revenue could be raised to help make up the deficit arising from changes to business taxation."

"Increasing TRV is one of the methods being considered to increase income to the States but if householders and businesses are being asked to pay more, it is essential to have in place a transparent and simple system of property measurement and taxation," said Deputy Trott.

Treasury and Resources successfully placed a Projet de Loi before the House last November that contained the enabling legislation that will overarch the new system which will in due course be renamed ‘Tax on Real Property’.

"My Department is taking an incremental approach to implementation. The Report that the States will consider later this month, if approved, will provide the framework for the new system. T&R will return to the House later this year or early next to seek approval for the more detailed issues," Deputy Trott added.

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