First-time buyer policy guidance

Contents

1. Introduction ...................................................................................................................................... 4
2. First-time buyer status .................................................................................................................. 4
3. First-time buyer homes and the planning system ...............................................................5
4. Discretion for purchasing first-time buyer homes ...............................................................6
5. Discretion for leasing first-time buyer homes .......................................................................9
6. Responsibilities and due diligence ......................................................................................... 10
7. Review of policy guidance ......................................................................................................... 10
8. Contact ...............................................................................................................................................11 Appendix 1 ................................................................................................................................................11 Appendix 2 ............................................................................................................................................... 12

1. Introduction

1. New homes built on designated land, along with homes made available through the targeted sale of existing social housing stock, play a key role in helping first-time buyers access home ownership. These homes are generally subject to first-time buyer restrictions that determine their use and occupancy.
2. The purpose of first-time buyer restrictions is to ensure that designated homes are reserved for eligible first-time buyers, supporting households entering ownership for the first time. These homes are intended to improve affordability and access to home ownership, and to preserve these benefits for future first-time buyers. The restrictions also ensure that the public value created through designated land or public investment is not diverted into the wider market.
3. This guidance has been developed to help Islanders understand the circumstances in which they may be eligible to purchase a property that is subject to a first-time buyer restriction.
4. Three pieces of legislation are particularly relevant when determining eligibility to purchase or occupy homes provided specifically for first-time buyers:

• Control of Housing and Work (Jersey) Law 2012, which prioritises housing "for people with strong connections or associations with Jersey and, more generally, in such a way that is in the best interests of the community in Jersey". Under this Law, all residential property transactions are subject to restrictions on the ability to purchase property and live in it.

• Planning and Building (Jersey) Law 2002, which allows for the designation of "land to be used to provide residential accommodation, whether it be accommodation for renting or accommodation for purchase, for persons who would otherwise have financial difficulties renting or acquiring residential accommodation in the general market for residential accommodation prevailing in Jersey". This provides the legal basis for rezoning' land for the development of first-time buyer properties and enables specific conditions to be placed on their use and occupation.

• Stamp Duties and Fees (Jersey) Law 1998, which sets out the reduced duty rates applicable to first-time buyers (see Appendix 1). Purchases over £700,000 incur standard rates of stamp duty or Land Transaction Tax (LTT).

5. Together, these provisions provide the core framework for applying this policy guidance and for determining first-time- buyer eligibility.

2. First-time buyer status

1. Only a first-time buyer in Jersey may purchase a property designated for first-time buyers.  
2. First-time buyers may also access assisted home ownership schemes, provided they meet the qualifying rules of the relevant scheme.  
3. A person is a first-time buyer in Jersey if they:

1. have never owned, or had any legal or beneficial interest in, any residential property in Jersey or anywhere else in the world, including jointly with a spouse or civil partner[1]; and

2. have Entitled' residential status under the Control of Housing and Work Law[2], or are purchasing a property jointly with an Entitled spouse or civil partner who has also never owned residential property in Jersey or elsewhere; and
3. are going to live in the property as their principal place of residence.

4. For the avoidance of doubt, a person who currently owns or has previously owned a property is not a first-time buyer. Ownership includes, but is not limited to:

• Prior or existing ownership (or part-ownership) of any type of residential property, including freehold, flying-freehold or share transfer property.

• Prior or existing ownership of a residential property acquired through inheritance or any other means.

• Prior or existing ownership of shares in a company that confer exclusive rights of occupation over a residential property.

• Being named, currently or previously, on a mortgage or title deeds.

• Holding a contract lease or having any arrangement where a property is held by a nominee or trustee for the benefit of an individual.

5. The above provisions apply even where the person has previously sold, transferred, relinquished, disposed of or otherwise ceased to hold any form of legal or beneficial ownership or interest in a residential property, including circumstances where a spouse, partner or former co-owner continues to own the property.

There are, however, circumstances in which the Minister for Housing ("the Minister") may exercise discretion to allow a person who is not a first-time buyer to purchase a property designated for first-time buyers. These circumstances are set out in section 4 of this guidance.

3. First-time buyer homes and the planning system

1. Where housing is delivered through the planning system specifically for first-time buyers, the award of planning permission is usually subject to restrictions – set out either through planning conditions or a planning obligation agreement – that regulate the occupation and use of the homes for first-time buyers. The nature of these restrictions has evolved over time as policies have responded to changing housing needs.
2. Planning conditions and planning obligations are attached to the land, and homes built on these sites may, therefore, remain subject to these restrictions in perpetuity, which affects their onward sale. Assisted home ownership schemes administered by social housing providers, Parish authorities or other relevant bodies may also include further qualifying criteria.
3. First-time buyer properties are intended for owner-occupation and not for leasing out, nor for use as second homes or holiday accommodation. The very limited circumstances in which leasing a first-time buyer property may be permitted are set out in section 5 of this guidance.

4. Restrictions or requirements imposed by planning conditions or planning obligations are enforceable under the Planning and Building (Jersey) Law 2002. Compliance with these requirements should be verified through the conveyancing process when first-time buyer properties are sold.
5. Mortgage providers will also routinely require borrowers to demonstrate compliance with all planning restrictions that apply to a property.
6. Suspected breaches of first-time buyer planning restrictions should be referred to the Planning and Building Compliance Team (contact details in section 8).

4. Discretion for purchasing first-time buyer homes

1. Homes restricted to first-time buyers are a limited resource. The Minister therefore wishes to adhere to the principle that only Islanders who are first-time buyers, and who are typically in most need of assistance, can purchase such properties[3].
2. For this reason, anyone who is an existing property owner, or who has previously benefitted financially from the sale of a residential property[4], will not normally qualify to purchase a property reserved for first-time buyers[5].
3. However, it is recognised that there are circumstances where the Minister may exercise appropriate discretion to allow someone who is not a first-time buyer to purchase, occupy and use a property restricted to first-time buyers. The level of discretion applied by the Minister will have regard to the prevailing market conditions and overall availability of supply relative to demand at the time.
4. The Minister always reserves the right to vary or modify the published policy principles for discretion, particularly as market conditions change. As such, this part of the policy will be subject to regular review.
5. In determining whether it is appropriate to apply discretion, the Minister will consider whether the purchaser's situation aligns with any of the following principles:

1. Inheritance: A person who is not a first-time buyer solely because they own, or previously owned, all or part of a residential property acquired through inheritance may fall within this principle where the inherited property does not provide suitable residential accommodation, nor generate sufficient profit to enable them to purchase a home that meets their needs in the open market.
2. Relationship breakdown: A person who previously owned a property with a spouse or partner that was sold due to relationship breakdown or divorce may fall within this principle where the division of household assets does not provide the person with suitable residential accommodation, nor generate sufficient profit to enable them to purchase a home that meets their needs in the open market.

3. Moving from a smaller home to a larger first-time buyer property: A person who originally purchased their current home as a first-time buyer (consistent with this guidance) may fall within this principle where they wish to sell that home in order to purchase a larger first-time buyer property that better meets their needs.

This principle recognises that first-time buyers should not be penalised as their circumstances change and that they may reasonably need to move up the housing ladder – for example, moving from a flat to a house.

Someone who already owns a flat that is restricted to first-time buyers must, as expected, sell to another first-time buyer.

However, someone who has purchased an open market flat as a first-time buyer, would be expected to sell their open market flat to a first-time buyer in order to benefit from Ministerial discretion to purchase a larger first-time buyer home[6].

4. Downsizing from a family home into a smaller first-time buyer property: A person may fall within this principle where they wish to right-size' from a larger family home to a smaller first-time buyer property that better meets their needs and, in doing so, releasing a larger home back into the market.

Homeowners in these circumstances might be empty nesters' or households requiring a smaller home because of changes to their health and/or accessibility needs.

To qualify under this principle, the person looking to downsize will be expected to meet all the following stipulations:

• The household must be under-occupying their current home by at least one bedroom[7].

• The current property must have 3 or more bedrooms.

• In accordance with the principles established by the Minister's Right- sizing policy, the person is in a position where they need to sell their current home to raise sufficient capital to purchase a downsizer property and, upon completion, they could not own any other residential property.

• The person must provide evidence that they are actively in the process of selling their current home.

• The property being acquired cannot be priced higher than their current home or cause them to take out a higher mortgage.

5. Making a lateral move to suit housing needs: A person may fall within this principle where they wish to move between similar-sized properties, and where the alternative home or location would better suit their needs, even though their household size has not changed.

This may include circumstances where a person wishes to move closer to family or work, or to a property with parking, outside space or a preferred location.

This area of discretion introduces some flexibility whilst protecting fairness for new, genuine first-time buyers. As such, anyone looking to make a lateral move into a first-time buyer property must sell their current home to a first-time buyer, or to a person who qualifies under the above circumstances.

Lateral move discretion will not be granted if the person is under-occupying their current home by more than one bedroom. In such cases, only downsizing discretion may be considered.

6. The Minister keeps these principles under regular review, taking into account housing supply, market demand, housing needs and wider government policy objectives.
7. Consent to purchase is unlikely to be granted to anyone who is not a first-time buyer whose circumstances fall outside of the described principles in paragraph 4.5.
8. A person may request discretion under only one of these principles set out in paragraph
   3. and may benefit from this discretion once only.
9. In all circumstances, where the Minister is asked to exercise discretion, the person must demonstrate that they would otherwise face financial difficulty purchasing a home suitable for their needs in the open market. Applicants may be required to provide assurances[8] or additional information as appropriate, which may include:

• confirmation of property valuation (or share of property valuation)

• gross household income and current savings

• details of assets such as land ownership

• the number of family members in the household

• equity (or expected equity) made from any property sale

• the deposit available for a future purchase.

10. A person may apply to the Housing Advice Service to request discretion to buy a first-time buyer home (contact details in section 8). The Housing Advice Service has been delegated responsibility to determine first-time buyer applications on behalf of the Minister. A senior officer will carry out a financial assessment based on the information provided by the applicant, under paragraph 4.9. The senior officer may consult the Minister's policy team in determining the application and, if it falls outside of the described discretionary principles in paragraph 4.5., will escalate the decision to the Minister for consideration.  
11. The Housing Advice Service will respond within 10 working days of the application, subject to the applicant having provided sufficient supporting information. A person who wishes to apply for discretion to buy a first-time buyer property is requested to do so as soon as possible before the property transaction takes place, in order to ensure that decisions can be made in a timely manner and not cause delays.  
12. If the first-time buyer property or assisted home ownership scheme that a person is seeking discretion to buy is subject to additional eligibility criteria (i.e., as part of a specific scheme), they will need to comply with the qualifying criteria of that scheme in the normal way. This includes any specific qualifying rules that may apply in respect of first-time buyer status.
13. For the avoidance of doubt, the Minister is under no obligation to grant discretion to anyone who is not a first-time buyer, including those who consider themselves to be in the circumstances set out under paragraph 4.5.  

14. Where a person who is not a first-time buyer is granted discretion to purchase a first-time buyer home, standard stamp duty or LTT rates will apply in all circumstances.  
15. The Minister for Housing cannot exercise discretion in respect of stamp duty or LTT liability.

5. Discretion for leasing first-time buyer homes

1. First-time buyer homes are intended for owner-occupation and not for leasing out, or use as second homes, holiday accommodation, short-term lets or full rental. These properties exist to support Islanders who need assistance to access home ownership rather than to provide rental investment opportunities.
2. It is recognised that some first-time buyer properties are subject to historic planning controls that allow them to be leased to another first-time buyer. This can be verified by checking the planning permission for the development on the Planning applications register and any restrictions listed in the Register of Planning Obligation Agreements. Leasing a property, in accordance with the controls in place, would, therefore, be permissible. Checks may be undertaken to confirm that the exemption applies.
3. In limited circumstances, a first-time buyer owner-occupier whose property does not have controls in place (as described in paragraph 5.2), may be permitted to lease their home with the permission of the Minister. For the Minister to consider any such request, as a minimum, the following conditions must be met:

All first-time buyer owners:

1. The owner must demonstrate a compelling reason[9] for needing to vacate their home and renting it out (e.g., working off Island on a temporary duty); and
2. The property must be leased to someone who qualifies as a first-time buyer or who is registered on the Affordable Housing Gateway waiting list; and
3. The lease must be for a limited duration, and for no more than 3 years, with the intention that the owner will return to live in the property.

4. Owner occupiers who purchased their home through an assisted home ownership scheme  will be required to meet any additional criteria that apply to that scheme to lease their home. Anyone in these circumstances should contact the Housing Advice Service in the first instance (contact details in section 8), which will refer the request to the relevant authority such as Andium Homes for consideration.
5. The Government of Jersey will retain a record of first-time buyer owners who have been given discretion to lease their homes as set out under paragraphs 5.3 and 5.4. Suspected breaches around the leasing of first-time buyer homes should be referred to the Planning and Building Compliance Team (contact details in section 8).
6. Homeowners wishing to lease their first-time buyer property are responsible for obtaining any additional permissions required, for example, from mortgage lenders and insurers. Evidence of such permissions may be requested. Any discretion granted by the Minister (as set out in section 5) in no way removes these obligations from the owner who wishes to lease their property.

7. Requests to lease out first-time buyer homes are considered on a case-by-case basis. The Minister is under no obligation to grant approval for first-time buyer homes to be leased.
8. First-time buyer owner-occupiers may take in a lodger without seeking permission to do so. A lodger does not need to be a first-time buyer.

6. Responsibilities and due diligence

1. Prospective first-time buyers should engage the services of a lawyer or other qualified conveyancer in good time to undertake the necessary due diligence for the purchase of a property that is the subject to a first-time buyer restriction.
2. Section 2 of this guidance sets out who qualifies as a first-time buyer in Jersey. It is the responsibility of the prospective buyer to determine if they are a first-time buyer.
3. Restrictions applying to first-time buyer developments vary, and it is the purchaser's responsibility to understand which restrictions apply to the property concerned. This includes liaising with the vendor or their agent to ensure all relevant conditions have been disclosed. This due diligence should be completed before entering into any significant commitments. Appendix 2 provides an overview of the main groups of first-time buyer developments in Jersey.
4. Prospective first-time buyers should be aware that the restrictions on many first-time buyer homes in Jersey apply in perpetuity. These restrictions mean purchasers will compete only with other eligible first-time buyers, which can assist with affordability. However, on resale, the property is also likely to be sold below full market value because the pool of eligible purchasers remains limited to new first-time buyers.
5. It is important for prospective purchasers, with support from their legal representative as needed, to ensure that all relevant planning conditions and restrictions are reflected accurately in the contract of sale.
6. For the avoidance of doubt, the application of this policy does not, and cannot, override any prevailing legal obligation or contractual covenant that might relate to a given property.
7. Section 4 of this guidance sets out the circumstances in which a person who is not a first- time buyer may be granted discretion to purchase a first-time buyer property. Where this applies, it is the responsibility of the prospective purchaser to ensure they have the necessary permission to proceed with the purchase.
8. Section 5 of this guidance outlines the conditions under which the owner-occupier of a first- time buyer property may lease their home for a limited period. It is the responsibility of the owner to ensure they have obtained all the required permissions before entering into any lease arrangements. This may include agreement of both lenders and insurers.
9. If a prospective first-time buyer, or a person granted discretion to buy a first-time buyer property or an owner seeking permission to lease their first-time buyer property, submits incomplete, inaccurate or misleading information about their status or their circumstances, this may negatively affect the related property transaction or lease arrangements.

7. Review of policy guidance

7.1. The Minister reserves the right to expand, change or modify any element of this eligibility

criteria, as and when required, to ensure that it continues to reflect housing need, capacity and resources.

8. Contact

1. The Housing Advice Service is the point of contact for all first-time buyer related queries or requests requiring Ministerial consideration:

Housing Advice Service

T: 01534 444444

E: [email protected]

Opening hours: Monday to Friday, 8.30am to 5pm

Employment, Social Security and Housing Union Street

St. Helier

JE2 3DN

2. An application form to request Ministerial discretion to purchase a first-time buyer home is available on the First-time home buyers page on gov.je.
3. Concerns or suspected breaches of first-time buyer planning obligations should be directed to the Planning and Building Compliance Team:

Planning and Building Compliance

T: 01534 445508

E: [email protected]

Opening hours: Monday to Friday, 8.30am to 5pm

Infrastructure and Environment Planning and Building Control PO Box 228

Union Street

St. Helier

JE2 3DN

Appendix 1

First-time buyer duty rates  

As set out in the Stamp Duties and Fees (Jersey) Law 1998, if a first-time buyer in Jersey purchases a property that is under £700,000, then a reduced amount of stamp duty or land transaction tax (LTT) is payable.

First-time buyer stamp duty rates against property values are as follows:

• 0% stamp duty up to a £350,0001% stamp duty from £350,000 - £600,000

• Rate of stamp duty relief decreases incrementally from £600,000 - £700,000

There are assisted home ownership schemes where the property might be valued above £700,000 but the purchaser is funding less than £700,000; the stamp duty reductions would apply in that case.

Appendix 2

Four main types of first-time buyer development in Jersey

1. Developments which are first-time buyer in perpetuity by virtue of planning condition or obligation agreement.
2. Developments which are first-time buyer in perpetuity by virtue of planning condition or obligation agreement where purchasers must come from the Assisted Purchase Pathway.
3. Developments which are first-time buyer in perpetuity but on contractual basis rather than there being an explicit planning condition or obligation agreement on the land.
4. Developments which were first-time buyer on initial purchase but not in perpetuity.

[1]Someone who has purchased a first-time buyer property cannot subsequently enter joint ownership of the property with someone else who is not a first-time buyer (including a spouse / civil partner).

[2] Someone granted Entitled residential status under Regulations 2(1)(e) and 2(1)(f) of the Control of Housing and Work Law must have been continuously ordinarily resident in Jersey for a minimum of 10 years to be considered eligible to be a first-time buyer on grounds of their residential status.

[3] The first-time buyer definition applies to the applicant and to any spouse, partner, or household member. The household will not meet the first-time buyer definition if any such person falls within the ownership criteria in paragraphs 2.4–2.5, unless discretion is applied.

[4] This includes residential property anywhere in the world or any type of residential property in Jersey, including freehold, flying- freehold, or share transfer classes of property. See paragraph 2.4-2.5. as to what constitutes ownership.

[5] This includes someone who is not a first-time buyer but who intends to purchase a first-time buyer home with an eligible first-time buyer. If the person who is not a first-time buyer is making a significant financial contribution to the purchase, intends to live in the property as their principal residence or will benefit financially from the purchase (e.g., through asset appreciation, future sale, or rental income) then discretion to purchase is unlikely to be offered by the Minister in these circumstances.

[6] It is accepted that the requirement to sell to a first-time buyer would lapse for all future sales of the open market property, unless a future vendor also wishes to receive Ministerial discretion to access a larger first-time buyer home.

[7] Households are not excluded from the right-sizing discretion because an adult child returns home occasionally, or a dependant stays one or two nights a week.

[8] An assurance (verbal or written) from a law firm that confirms the circumstances of their client will be acceptable to the Housing Advice Service.

[9] The Housing Advice Service will assess whether the reason given is enough to justify a first-time buyer home being leased out and may request additional evidence as needed.