‘Elderly should be able to put off TRP payments’

One deputy – Employment & Social Security president Peter Roffey – is considering a move to block the increase unless a scheme is introduced to allow homeowners over the age of 70 to defer TRP payments until they can be recovered from their estate when they die.

Policy & Resources’ draft 2024 Budget, unveiled on Tuesday, includes another big hike in TRP – by an average of 17% across all residential properties – with increases of between 10% and 44% on homes of above average size.

‘The States has been increasing TRP significantly over a number of years,’ said Deputy Roffey.

‘I have made clear in past debates that I will only support such a policy so far, without either a system for deferred payment, effectively recoverable from the estate, or a cost-effective equity release scheme.

‘I think my breaking point has come because taken any further, without such safety nets, this policy risks significantly increasing poverty among elderly home owners on low incomes.’

Age Concern chairman Dave Inglis criticised the proposed TRP increase as ‘over the top’ and said asset-rich, cash-poor pensioners would be hit hard.

‘I can accept that you pay taxes on a property that you own, but compared to pension increases of only 6% or 7% this is excessive,’ said Mr Inglis.

But he was concerned that a scheme to allow elderly homeowners to defer TRP payments could cause them unnecessary anxiety.

‘People who are keen to ensure their family enjoy their property when they are no longer around are going to be living with a degree of anxiety and worry as to how much TRP might cost in however many years’ time,’ he said.

Deputy Roffey believed that it would ‘not be rocket science’ to create a deferred payments scheme and pointed out that the States previously operated one to assist pensioners with home improvements.

He said older homeowners who could afford their TRP bills would probably continue paying them anyway, but that a deferred payments scheme ‘could be the difference between poverty and a decent standard of living’ for less affluent pensioners.

In its Budget report, P&R has recognised that affordable housing is a significant issue, but also stated that property taxes locally remained low when compared to other places.

‘The main problem is that the size of one’s property is a poor guide to one’s ability to pay,’ said Deputy Roffey.

‘There is a correlation between property size and its value, but it is very far from perfect. But even if TRP was a tax on property value, it would still seriously impact those on relatively low and fixed incomes.

‘It would make it a wealth tax on those with no realistic access to that wealth.’

TRP on most properties has increased by hundreds of pounds a year since the States started to use indirect taxes to recover some of the income lost when the zero-10 company tax regime was introduced in 2008.

Some deputies are believed to be relaxed about TRP climbing higher still to help deal with the States’ financial challenges and discourage under-occupancy in the housing market.

‘Of course down-sizing is an option for some, but it is not cheap,and suitable properties are limited,’ said Deputy Roffey.

‘It can also be a real trauma for the very elderly. I cannot support a policy of financially forcing our senior citizens out of homes they love and where all of their fondest memories were made.’

He said he was ‘seriously considering’ submitting a Budget amendment to limit TRP rises to inflation only and directing the creation of a deferred payments scheme.

Deputy David De Lisle, a long-time campaigner against TRP hikes, believed the latest proposed increases would be particularly unfair on poorer pensioners who own larger family homes and would discourage home ownership among younger people.

‘It will add to the existing hardships being suffered silently by many,’ he said.

‘This is a regime that is not working for the people of Guernsey but solely for the very wealthy and the corporations.’