Buyers exempted from total of £500k in document duty
A total of 45 properties have been exempted from paying a combined total of nearly £500,000 in document duty since a time-limited policy to incentivise downsizing was introduced in November 2022.
The figures have been released in a response from Policy & Resources president Lyndon Trott to Deputy Gavin St Pier, who submitted a written question on the issue.
Under the policy, which is due to expire on 31 December this year, as outlined in the 2023 Budget, eligible buyers are charged document duty at a rate of 0% for the first £400,000 of their replacement principal private residence, providing that there is at least a 25% reduction in the Tax on Real Property rating on the domestic building element between the property being sold and the property being purchased.
Additionally, the property being sold must have been the buyer’s principal private residence for at least two years.
The scheme can only be accessed once in respect of a property being sold.
According to the data provided by P&R, 37 of the 45 eligible transactions received the maximum saving relief of £10,875, as the realty values of the properties exceeded £400,000.
Seven of the remaining eight properties received more than £8,000, while one property – which had a realty value of £214,500 – received just over £4,800.
Deputy Trott said that an evaluation of the policy would take place as part of the development of the 2025 Budget.
Deputy St Pier said that, while it was interesting to see the impact of the policy so far, the statistics could not be judged as a success or a failure, due to the fact that, when the policy was announced, there were no estimates given of the anticipated number of property purchases and associated stamp duty saving that would benefit from the exemption.
He added that he was interested to see P&R’s analysis of the policy’s impact, as well as its recommendations for continuing with downsizing exemptions, or not, in next year’s Budget.
‘Personally, I’d like to see some time and thought given to looking outside the island and thoroughly analysing the impact of shifting the stamp duty transaction cost from the buyer to the vendor, as that might have a greater long-term beneficial market impact, particularly to enable first-time buyers to get a foot on the property ladder,’ he said.
