“Budget bad news for first-time buyers” - expert

Thursday 18 September 2014

Next week’s Budget will make it harder for first-time buyers to get on the property ladder and will discourage new wealthy immigrants from coming to Jersey, according to a property lawyer.

Paul Scally, a partner at Le Gallais & Luce, says that far from helping first-time buyers and attracting more super-rich immigrants as claimed, the Budget’s stamp duty proposals will have the opposite effect.

The Budget, due to be debated next week, could see an extra £5,500 tax put on the price of a typical three-bedroom house for first-time buyers. It proposes dropping the threshold for the big stamp duty discount that first-time buyers get from £450,000 to £400,000.

Deputy John Young has proposed an amendment to keep the discount threshold where it is, but Mr Scally says that the States should have gone further and increased it to £500,000, which is still less than the price of a typical three-bedroom house.

Mr Scally said: “In this year of election [Treasury Minister] Senator Philip Ozouf had promised help for first time buyers and expressed a desire to increase the number of ‘K’ category people coming to the Island.

“His budget goes against both these aims.

“To drop the First Time Buyer threshold from £450,000 to £400,000 makes no sense at all.

“If anything the threshold should be increased to £500,000 to help all families get on the ladder. The 'loan deposit' scheme ran by the states last year has been stopped with no signs of returning.

“We have been promised two new lenders but when will they arrive?

“The offer of a reduction on stamp duty of you are borrowing less then £400,000 will only really benefit those in the investment market and few others.”