Jersey Estate Agents Express Doubts Over Stamp Duty Hike Plans

by Robert Lee, Tax-News.com, London

12 September 2002

President of the Jersey Estate Agents Association, Alan Maclean recently expressed doubts that the planned increases in stamp duty on property transactions will achieve the desired effect.

The move was announced by the Finance and Economics Committee as part of a package of measures intended to help bridge the States funding gap.

In light of current uncertainty, sparked by the European Union's double-pronged tax attack on offshore financial centres, the Committee announced earlier this month that it would hang fire on any radical changes to its corporate taxation regime until after the results of the EU's Code of Conduct for Business Taxation are known. However, in the interim, Jersey businesses and residents will become subject to a new vehicle registration duty, increases in taxation on petrol and property, and a tax on benefits in kind, if proposals currently in the pipeline are approved.

However, Mr Maclean is sceptical about the potential benefits of a stamp duty increase:

'I very much doubt it will raise £2 million in additional revenue each year as Finance expect,' he told the Jersey Evening Post, adding that: 'I understand that figure was based on last year's transactions, and things have changed since then with house prices stabilising.'

The Association President continued: 'Raising stamp duty will not have a significant effect on the market and essentially follows a move already made by the Labour government in the UK.'

According to the JEP, the Finance and Economics Committee proposals suggest a regrading of the stamp duty payable on a property transaction. The first £50,000 of such a transaction would continue to be taxed at 0.5%, but this would rise in increasing increments to 2% for properties valued at over £500,001.

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