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Corporate Services Scrutiny Panel Budget 2019 Review – Submissions
Cherry Godfrey
Dear Scrutiny Panel,
Although it is difficult to gauge exactly what impact these changes would have, we have made a few comments below in red next to the questions:
1)In increasing the first time buyer relief to properties up to £500,000 will this enable more
first time buyers to purchase a property? It will but the "tapering" of relief between £450K & £500K means as you get closer to the maximum purchase price of £500K, the savings are nominal so not really much of a help to FTB's.
- Will the increase of the first time buyer relief for properties up to £500,000 allow first time buyers to purchase a typical (i.e. three bedroom) family home? For some yes, but Sadly most 3 bed properties are now above £500K so probably not.
- What effect, if any, will the increase of stamp duty/LTT on properties over £500,000 have on the market? The £600K to £900K market has always been slower than the market to £600K so it could put people off "upsizing" as it will become even more expensive to buy. Therefore might dampen down the prce.
- The reduction of stamp duty/LTT on mortgages up to £600,000 is being introduced to rectify a perceived inequality. Does this relief rectify the unfairness in the market and provide a benefit to purchasers of low value property? Yes this is a positive move. Provides a benefit for lower priced purchasers.
- Will it be beneficial to have less stamp duty bands? Personally I don't think it makes much difference. People often thing they will save a fortune by just remaining within a lower band, but when you calculate the difference of tipping into the next band, the difference is nominal.
- Will the proposed changes to stamp duty allow Jersey to remain competitive internationally? Not sure why this matters – the idea is to help local people buy their own homes, not encourage international investors.
- Will the overall stamp duty provisions in 2019 Draft Budget Statement either assist or hinder the property market in Jersey? I think it will assist but the 1% increase in the "medium" bands (£600K to £1M) may cause that area of the market to slow even more and encourage people to extend their existing properties meaning there will be fewer affordable family homes.
Kind regards,
Howard De La Haye Cert CII, DipPFS Director