Document duty ‘significant’ boost for Alderney coffers

The States approved the 2022 Budget earlier this week, which included agreeing to maintain document duty and conge – taxes on property transactions – at existing levels.

There was also an increase in property tax and fuel duty.

Policy & Finance Committee chairman Bill Abel said that the impact of Covid-19 on Alderney’s finances had been much less than in other jurisdictions.

‘However, we must keep pace with rising costs alongside creating sensible reserves to help us manage future budgets,’ he said.

‘Our budget proposal to increase the Alderney Property Tax (APT) by 2.3%, in line with the Retail Price Index, excluding mortgage interest June 2021 rate, is considered to be the minimum increase to APT while continuing to recognise the everyday struggles of our hard-working population.’

Fuel duty and document duty income are now retained by the States of Alderney and together with the revenue from APT, this is forecast to be enough to offset the loss of the routine grant support from Guernsey which will end this year.

‘Sadly, Covid-19 will remain with us and the uncertainty that this brings is recognised in our budgeting strategy,’ said Mr Abel.

‘Document duty has been a significant revenue stream with the surge in the property market in this first year in which we are able to retain all of the proceeds.’

This will enable the States Treasury to bank an estimated £500,000 in reserves this year – some £400,000 more than was originally expected – adding to the strategic reserve target that has been set following the move away from financial reliance on Guernsey.

‘It is acknowledged that the current property sales trend is unlikely to continue, but this year’s performance has given us an unexpected opportunity in year one of the new financial relationship with Guernsey to make a major contribution to our target of building a strategic reserve for the longer term,’ said Mr Abel.

‘However, to maximise the advantage from this windfall income, we must also keep pace with rising costs.’

He added that the island faces the issue of a lack of affordable housing, social and key-worker housing and rental property. And next year, the States will consider options for streamlining the current document duty and conge rates, including incentives for first-time buyers.

Finance Committee chairman Chris Harris referred to the numbers of staycationers visiting Alderney from the other Bailiwick islands during the pandemic and noted that with the return of UK visitors, the hospitality sector was thriving.

‘New attractions such as the reopening of the Odeon [bunker] have seen our tourism product increase and we hope to continue with such projects in the coming years,’ he said.