Scrutiny call to raise stamp duty on buy-to-let property

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The Corporate Services Scrutiny Panel has lodged an amendment to the Government Plan calling for a higher rate to be introduced for these types of properties to help reduce demand in the market by ‘prioritising owner-occupiers and first-time buyers’.

In its amendment, the panel has suggested a 2% increase for stamp duty rates which would also ‘raise a reasonable tax revenue’. The panel did accept that the Treasury Department might seek to alter the increase on review.

In a report accompanying the amendment, the panel said: ‘It has been well rehearsed that the Island is facing unprecedented demand for residential property, with this showing no sign of slowing.

‘It is clear that timely actions to reduce the continued demand and increase in property price is needed; the panel believes that waiting until after a further review being carried out by the Government of Jersey will result in unnecessary delays when no time constraints are imposed.’

Senator Kristina Moore, who chairs the panel, said she hoped that the Council of Ministers would support this amendment, and three others they had lodged, ‘which aim to assist in addressing the increased demand for housing in Jersey, the uncertain cost of living for Islanders and seeks to ensure that spending of public funds is put to best use’.

Other amendments include limiting borrowing for the Fiscal Stimulus Fund by £20.4 million, which has awarded money to several projects in an effort to boost economic recovery following the pandemic, and removing a proposed £20m Technology Fund included in the plan.

Senator Moore said: ‘After thorough examination of the Government Plan and questioning of ministers, we have proposed a series of amendments which look to improve the way taxpayers’ money is spent over the next four years.’

Reducing borrowing for the Fiscal Stimulus Fund would ensure that ‘unjustified borrowing’, on top of the £20m already committed to projects, does not take place, according to the panel, which said it had ‘expressed a number of concerns in respect of the implementation and success of the fund not being appropriately timely, targeted and temporary’, with many of these concerns remaining.

The panel also believes that a proposed Tech Fund has not met the Island’s Public Finances Law requirements for establishing a fund.

A potential increase in Impôt Duty on wines and spirits by 5% should be reduced to 2.5%, the panel says, and applied to all alcohol ‘to keep duty broad, simple and fair and take into account the impact of the pandemic on the hospitality sector by increasing duty to 1% below the June 2021 rate of inflation (3.5%)’. This change would reduce revenue raised by £231,000.

The amendments are expected to be debated at a key States sitting, which begins on 13 December.

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