Levy would be the ‘unfair discriminatory alternative’

The letter from Mr Hands and the Press article which appeared on the Friday 27 January seemed to propose a one-off levy at the time of purchase – presumably some form of enhanced document duty – which on the basis of the open market sales for December 2022 would raise about £300,000.

Scale that up for a 12-month period you end up with a figure of about £5m. (allowing for the fact that there are usually more property sales during the summer months). However within 24 hours it became clear that the levy was now seen as an annual tax raising £20m. a year, as opposed to a one-off levy at the time of purchase.

If the proposal is that an annual tax be levied that clearly discriminates against the open market residents of this island. They are not all billionaires, nor do I imagine are they domiciled in Guernsey but paying little or no local tax as they are taxed elsewhere on their worldwide income.

Many open market residents live in houses at the lower end of the open market and have lived in the island for 30 years or more. Many are retired and are often ‘property rich but cash poor’ living on fixed retirement pensions. Saddling them with an annual bill of several thousands of pounds is simply not fair, particularly bearing in mind that there are far more locally-qualified residents who are in a far better position financially who would be asked to contribute nothing, as the levy would only be applied against the 1,600 or so open market properties.

The Soulsby/St Pier proposals were dubbed as the ‘fairer alternative’ to GST. If the Hands/Ferbrache proposal of an annual levy based on the value of an open market property proceeds that would certainly be the ‘unfair discriminatory alternative’.

Perhaps at this stage Mr Hands and the chief minister should clarify what the proposal actually is. However please learn from history. Several years ago proposals to limit the open market were being bandied around in the States and in the Guernsey Press. As a result of the uncertainty that was caused, open market property values tumbled and sales were reduced to three or four a month.

Mr Hands, who has lived in the island for 14 years, will no doubt remember this, as I am sure the chief minister who was at that time a practising advocate. No doubt the profits from his conveyancing department must have fallen dramatically.

So gentlemen please tread carefully as your suggestions – no doubt well-meaning – could be full of unintended consequences.

Name and address supplied

Editor’s note: Since this letter was received, Policy & Resources has said it will not investigate this idea.