David Goy said his concept of a Productivity Incentivisation Tax, with heavy penalties for underused local property and other assets, would both ensure fairness and mean that people using the island in this way would contribute financially for that privilege.
‘If someone is using Guernsey as a tax-efficient place of residence without creating local jobs or contributing a fair level of taxation toward the services they use, then it is reasonable to expect them to contribute more fairly to the island that supports their lifestyle,’ he said.
Resident high-net-worth individuals may be fiscally neutral or even a net drain on public resources, he said.
‘When someone uses our hospital, drives on our roads, benefits from our infrastructure, and enjoys the safety and stability of our island, while simultaneously structuring their wealth as “non-income” in order to avoid paying the standard 20% income tax rate, the burden is effectively shifted onto the local working population,’ said Deputy Goy.
‘That is the problem the Productivity Incentivisation Tax is intended to address.’
Under his scheme, vacant and underused property, including holiday homes, would be subject to a levy, either through a monthly surcharge or a substantially higher TRP rate, which could encourage those properties back on to the local market. Any revenue raised would be directed to a social housing fund, which would prioritise local families.
A Minimum Alternative Tax would be introduced for individuals living in a high TRP property. If their declared income tax contribution falls below a defined threshold, they would instead pay a Resident Contribution Fee. Local retired people living on pensions and savings and paying tax through the existing system would not be penalised, he said.
‘The objective is to ensure that HNWIs reporting zero or exceptionally low taxable income on paper still make a meaningful contribution toward the island’s public finances.’
Extra levies would be placed on high-end assets which need local licensing or infrastructure support, including luxury vehicles, private jets and luxury vessels.
And an elevated progressive rate of document duty, stretching as far as 15%, would apply to all property transactions over £2m.
‘When substantial wealth is realised through the sale of luxury property, a portion of that value should contribute back toward the island’s long-term fiscal stability,’ said Deputy Goy.
Deputy Goy said that PIT was not simply about taxation, but was also intended to incentivise economic contribution and productive activity.
He would propose that any HNWI running a business employing at least 10 local workers and paying corporate taxes could be exempt from the ‘MAT’ or receive credits against his planned luxury taxes.
‘The intention is simple – if individuals wish to benefit from Guernsey’s favourable tax environment, they should also be encouraged to contribute meaningfully to the local economy through employment, investment, and productive enterprise.
‘At the end of the day, PIT is designed to raise necessary revenue without placing additional strain on lower-income households, the middle class, or genuinely productive businesses.’
‘Guernsey cannot simply tax its way out of a deficit of this scale, let alone tax its way into long-term prosperity.
‘PIT is one necessary component of broader tax reform, and it could make a meaningful contribution toward fiscal stability. However, it must go hand in hand with genuine fiscal competence, discipline, transparency, and accountability, all of which currently appear lacking.
It must also be accompanied by genuine economic growth and diversification beyond finance, and beyond excessive dependence on the UK and EU markets, which again remains an area where we currently appear to lack a coherent long-term strategy.’
Deputy Goy said that his plans were still in draft with much of the detail still to be finalised.