Tax-free savings policy idea for first-time buyers and renters
First-time buyers and renters could benefit from a tax-free savings policy to be proposed at this year’s general election.
A new Guernsey Property Savings Account would allow first-time buyers and renters to save up to £60,000 towards a property purchase or rental deposit without paying tax on the interest earned.
The policy will be put forward by the political movement Future Guernsey when it launches its full manifesto later this month. It will then invite candidates to sign up to its platform ahead of nominations opening on 12 May.
Former Guernsey Housing Association chief executive Steve Williams, who is part of a housing policy working group for Future Guernsey, backed the tax-free savings account as one of a number of ideas needed to help people get on the property ladder.
‘The challenges for renters and first-time buyers in particular are significant and we need to assist this portion of our population as much as we possibly can,’ said Mr Williams.
‘Naturally, much of the housing policy we will unveil later this month will focus on how we can construct more homes, but there are also a number of fiscal levers we can pull which we believe, if actioned, would make a meaningful difference to first-time buyers.
‘This policy is a classic example of how collaboration across policy areas can deliver very real and actionable benefits for the electorate.’
The local savings account would be loosely based on the UK’s Lifetime Individual Savings Account, although that also attracts a 25% bonus paid by the government, up to a maximum of £1,000 per year.
Under Future Guernsey’s policy, the saver would be allowed to withdraw funds at any time. The interest would be untaxed if the funds were put towards the cost of a house purchase or rental deposit, but would be taxed if the funds were used for any other purpose.
The movement said it was encouraged by initial talks held with local savings providers about their interest in the concept of a Guernsey Property Savings Account.
‘Guernsey has a history of being a nimble jurisdiction that can adapt quickly to market forces,’ said Mike Leonard, who founded insurance and technology group First Central and now sits on Future Guernsey’s board.
‘We want to bring that spirit back to the fore and encourage the type of enterprising spirit we’ve always enjoyed.
‘This policy is a classic example of how we would urge our politicians to be thinking about how they can work with the private sector to begin to tackle an issue that is affecting increasing numbers of islanders and potentially locking local young people out of the option to return or remain here.’
Future Guernsey announced last month that its manifesto would include relocation packages to attract young adults to move back to the island.
It said that providing financial assistance to local youngsters living away from the island could give them hope of returning home and boost the economy.
Future Guernsey is not currently registered as a political party but is expected to register in the next few weeks and field candidates at June’s general election.
