Local politician Sark aims to reduce property taxes for residential homes in the local market
The Policy & Finance committee in Guernsey is set to present a proposal to the island's parliament on 1 October, aiming to reduce the income tax on local real estate. The Chair of Policy & Finance, Conseiller John Guille, is spearheading this initiative.
The new tax rates for local properties are proposed to be slashed from the current rate of 7.5% to a more affordable 4%. However, open market homes will still be subject to a transfer tax of 7.5% after sale.
The new tax rates will be drawn up by Guernsey Law Officers, and once completed, new legislation will have to be presented to Chief Pleas again for approval. This move is intended to support local buyers and sellers, making property transactions more accessible within the local market.
In a related development, the Sark's Chief Pleas is considering a proposal to cut the property transfer tax. Last year, a loophole was identified that allowed companies owning real estate to avoid paying the transfer fee without updating the central property register after a sale. This loophole has been a significant loss of revenue for the government's small tax net.
To prevent such losses, other taxes, such as an annual tax on homes levied on companies which own residential property over a certain value, have been considered. The revenue generated from Chief Pleas' 2024 budget was £1.8m, underscoring the importance of this issue.
The Policy & Finance committee has formally raised the issue, stating that all property owners would be subject to some form of taxation if transactions take place. If approved, the tax rate for local properties will be reduced, while the rate for open market homes will remain 7.5%.
Unfortunately, the name of the politician who initiated the proposal to reduce income tax on local real estate and the date for the parliamentary debate on this topic have not been disclosed in the search results. Nonetheless, the proposed changes, if implemented, are expected to have a significant impact on the local real estate market in Guernsey and Sark.
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