Jersey: Personal Taxation
Stamp duty of 0.5% is payable on real estate transactions. Duty on transactions over GBP50,000 increases in 0.5% steps to a maximum of 3%.
The 2009 budget included the removal of all stamp duty for first-time buyers on property purchases at values of up to GBP300,000 along with an increase in the band at which first-time buyers receive a discount on their stamp duty from GBP300,000 to GBP400,000. The upper limit was temporarily increased in the 2012 budget to GBP450,000 from December 1, 2011, to November 30, 2012, further extended to December 31, 2013.
The budget also led to the introduction of a new Land Transactions Tax for residential property share transfer transactions in 2009.
Land transaction tax (LTT) is a tax on share transfer transactions for example share transfer flats. It is equivalent to stamp duty on freehold property. Anyone who buys property by share transfer is legally obliged to pay a tax exactly equal to the amount of stamp duty that would have been paid had the property been freehold. The tax has been introduced to create fairness between the costs of buying freehold property and the costs of buying share transfer property. Previously share transfer did not attract any form of property tax.
The LTT applies to:
- The person who buys shares in the company and becomes entitled to occupy the property;
- The beneficiary of a trust that purchases the shares of a company and those shares give the right of occupation to the property;
- A person that is substituted for another person as a beneficiary of a trust, where the trust holds the shares of a company and those shares give the the right of occupation to the property;
- A secured party who has created a secured interest on the shares under a security agreement e.g. where a mortgage has been taken to finance the purchase of the shares.
The LTT is due within 28 days following the date of the transaction. If the duty is not paid within this time limit, a surcharge of 10% will be charged. LTT can be paid in advance of the transaction.
LTT is calculated on the market value of the shares purchased. The rate of duty varies depending on the value of the transaction. For example, property costs of GBP550,000 would attract a total LTT of GBP9,330.
Property costs of less up to GBP50,000 is subject to 0.5% with a minimum of GBP10 payable. Property between GBP50,001 and GBP300,000 incurs the GBP80 basic charge, plus 0.5% on the first GBP50,000 and 1.5% on the next GBP250,000.