Local market homes could see a decrease in property tax under Sark's proposed plans.
In a move that could potentially make property transactions within the local market more accessible, the Chief Pleas of Sark is contemplating a reduction of the property transfer tax. The current rate of property transfer tax stands at 7.5%, and if approved, this rate for local market properties could be reduced to 4%.
The politician proposing this reduction has not been explicitly named in the provided search results. However, it is clear that the intention behind this proposed change is to support local buyers and sellers. This reduction, therefore, does not seem to have a direct impact on the intended support for local buyers and sellers through the proposed reduction of the property transfer tax.
Interestingly, a loophole in the property transfer tax allows companies owning real estate to avoid paying the transfer fee without updating the central property register after a sale. This loophole does not appear to be directly addressed in the proposed reduction of the property transfer tax for local market properties.
It is worth noting that open market homes will still be subject to a transfer tax of 7.5% after sale. Other taxes, such as an annual tax on homes levied on companies owning residential property over a certain value, have been considered to prevent losses of revenue.
If the proposal is approved, the policy and finance department will propose this reduction at a meeting on 1 October. Guernsey Law Officers will draw up the different rates if the proposal is approved. After the rates are drawn up, new legislation will need to be presented to Chief Pleas again.
The Chief Pleas' revenue from its 2024 budget was £1.8m. The exact implications of the proposed reduction on the revenue of Chief Pleas are yet to be determined. However, it is clear that the Chief Pleas is open to exploring ways to support local buyers and sellers in the property market.
The new annual tax on homes levied on companies was not mentioned in relation to the proposed reduction of the property transfer tax for local market properties. This suggests that the focus of the proposed change is primarily on supporting local buyers and sellers, rather than on taxing companies.
In conclusion, the proposed reduction of the property transfer tax for local market properties could potentially make property transactions more accessible for local buyers and sellers. However, the exact implications of this proposal, including its impact on the revenue of Chief Pleas and the continued existence of the loophole, remain to be seen.
