22 May 2018
Guernsey's Open Market continues to show encouraging signs
Latest figures for the Open Market in Guernsey could be cause for optimism and confidence, writes Carey Olsen partner and head of property, Jason Morgan.
The most recent conveyancing statistics published by Unusualities of Guernsey, an independent compiler of Guernsey conveyancing statistics, showed that there were 17 Open Market transactions in the first quarter of 2018. This built promisingly on the 21 Open Market transactions recorded in the fourth quarter of 2017 and the 48 for last year as a whole.
Moreover, the 17 sales in the first three months of this year are all 'real' property purchases recording a median Open Market price of £746,000. They do not include the inter-family and inter-company sales, often priced at £1, which have seen a notable increase in recent months following a change in the law removing the document duty saving previously enjoyed on property acquisitions effected by share transfer.
In effect, what this means is that there are significant signs of an increase in Open Market transaction activity and an indication that the perceived green shoots are in fact real ones.
The new non-domicile rules for individuals that are being introduced in the UK, coupled with uncertainty around residency status and higher property taxes (such as Stamp Duty Land Tax), not to mention the prospect of a Labour Government, are reportedly leading many high-net-worth individuals (HNWIs) to consider leaving the UK. If that is the case, then there is no reason why a move to Guernsey should not be a real consideration for such individuals.
Locate Guernsey, the States of Guernsey (States) funded promotional agency, recently announced its end of year results and described them as 'strong', owing to the fact that 24 relocations took place during 2017. Of the 24, nine were individual relocations and 15 were businesses that brought with them over 50 new jobs.
In addition, new tax rules were introduced in Guernsey at the start of the year, designed to encourage the relocation to the island of HNWIs and their families. The changes have seen an income tax break for new residents who spend at least £1.5 million on an Open Market property (giving rise to a Document Duty take of £50,000 or more).
A new lower tax cap of £50,000 will be available to such HNWIs for the year of charge in which the individual takes up permanent residence and will then apply for the following three years. This is a substantial reduction from the longer standing caps of £110,000 on non-Guernsey source income and £220,000 on worldwide income.
The States proposed the initiative as part of its ‘Future Guernsey’ manifesto, a document that outlines its long-term vision for the island’s prosperity. The core objective is to make the island 'one of the healthiest and happiest places in the world' by focussing on four key areas: quality of life; community; Guernsey's place in the world; and the economy.
The island’s pragmatic, proactive and efficient approach to assisting new businesses and individuals, coupled with the unique culture and lifestyle people find once they arrive here, make Guernsey a very attractive proposition for those looking to relocate from the UK.
We will be watching how the Open Market performs over the next quarter with great interest to see if the efforts of Locate Guernsey, together with the States' vision, see the relocation numbers continue to climb.
If you are considering relocating to Guernsey, you are advised to talk to a member of our team at the start of the process in relation to your personal, business and tax affairs.
© Carey Olsen 2018.