Index
1. What stamp duty is payable on a freehold purchase?
2. Is there any way to mitigate stamp duty?
3. Is any stamp duty payable on leasing property?
4. Can I complete on any day of the week?
5. If I acquire a property which has an existing commercial tenant is there any protection for that tenant at the expiry of the lease?
6. Can a floating charge be secured over Jersey real estate?
7. Can anyone purchase commercial property in Jersey?
8. Is there a guarantee of title system in Jersey?
9. Can anyone lease commercial property in Jersey?
10. Can I get specific performance of an agreement to lease or purchase property in Jersey?
11. Can I receive rent gross as a non Jersey Resident or is tax withheld?
12. Can property be held on trust in Jersey?
13. Is there any VAT in Jersey?
1. What stamp duty is payable on a freehold purchase?
On a freehold purchase stamp duty is payable on the market value of the property on the following accumulative scale:
0.5% on the first £50,000 of value
1.5% on the band between £50,000 and £300,000
2% on the band between £300,000 and £500,000
2.5% on the band between £500,000 and £700,000
3% on the value above £700,000
Thus, on a property where the market value is in excess of £700,000 stamp duty on the purchase is £13,000 on the first £700,000 of value and 3% on the balance.
In addition, to the above document duty of £50 and Jurat stamps of £20 are also payable. Click here to use our Freehold Purchase stamp duty calculator.
In addition, stamp duty of 0.5% is chargeable on the amount of any secured borrowing over Jersey real estate. As well as the above document duty of £50 is also payable. Click here use our Borrowing stamp duty calculator.
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2. Is there any way to mitigate stamp duty?
Due to the Treasury having "plugged" the majority of stamp duty mitigation schemes effectively the only arrangement left is if a property is owned by a company with the property being the only asset of that company. If you acquire the shares of the company then no stamp duty is payable unless the shares in the company carry with them a specific right to occupy that property. This would not be the case if the property is a commercial property and it is the only asset of the company.
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3. Is any stamp duty payable on leasing property?
In Jersey there is a distinction between a lease of less than nine years and one of more than nine years. In the case of a lease of less than nine years this can merely be a written document signed by both parties. If it is for a period in excess of nine years (or has the ability to be for a longer period by way of an option) then to be enforceable the lease must be passed before the Land Court on a Friday afternoon. (see paragraph 4 below)
As regards stamp duty this is payable only on a lease that is passed before Court.
In essence stamp duty is calculated on the basis of the rent payable during the first twenty-one years of the term of the lease. If there are pre-agreed rent increases these must be used to calculate the aggregate rental over a twenty-one year period.
If the rent is reviewed to either market or RPI increase then the formula is based upon the commencing rent multiplied by the number of years (with a maximum multiplier of twenty-one) and of this total the first £100,000 is charged at the rate of 0.5% and the balance at the rate of 0.75%. If there is any premium paid the stamp duty on the premium is calculated separately on the same basis as if it were a freehold purchase (see question 1 above).
Click here to use our Lease Stamp Duty calculator.
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4. Can I complete on any day of the week?
In Jersey freehold conveyances and the registration of mortgages only take place on a Friday afternoon. Conveyances are completed by way of passing a formal deed before a Land Court and all the parties to that deed swear an oath that they are aware of the contents of the deed and will not act against it upon pain of perjury. There is therefore a requirement for the personal appearance of the parties or a duly authorised representative e.g. an attorney authorised by a power of attorney (which has to be registered in the Public Registry in Jersey before it is effective) or by a director of a company authorised by a resolution of the board.
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5. If I acquire a property which has an existing commercial tenant is there any protection for that tenant at the expiry of the lease?
On a fixed term lease there is no protection for a commercial tenant and they have no right to require a renewal of the lease.
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6. Can a floating charge be secured over Jersey real estate?
Jersey does not have the concept of a floating charge. Any charge or hypothec must be for a fixed amount (although it can secure a contingent liability such as a fluctuating overdraft or guarantee) and must be registered in the Public Registry.
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7. Can anyone purchase commercial property in Jersey?
For an individual to acquire commercial property in Jersey they must be residentially qualified, click here for more details in respect of Housing Qualifications.
However, any company can acquire commercial property in Jersey or if the Jersey property is already owned by an existing company which has no other assets then one could acquire the shares of that company as at present this does not attract stamp duty or land tax in Jersey. Please note that the Housing Law does not permit any corporate body other than a company to acquire property.
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8. Is there a guarantee of title system in Jersey?
Whilst there is a land registry in Jersey known as the Public Registry it is a Registry of Deeds and not of title. There is no guarantee of title provided in respect of property transactions and title is based upon the conveyance or lease recorded at the Public Registry.
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9. Can anyone lease commercial property in Jersey?
An individual or company can lease commercial property for less than nine years in Jersey but if it is in excess of nine years then the consent of the Housing Minister is required and this will not be granted to an individual unless they have Housing Qualifications. Click here for more details on Jersey’s Housing Qualifications.
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10. Can I get specific performance of an agreement to lease or purchase property in Jersey?
It is not possible to get specific performance of a contract to purchase real estate situated in Jersey and the remedy is only in damages. In respect of a lease of premises situated in Jersey it is possible to get specific performance to grant a lease up to a period of nine years with the remedy for the balance of the term above nine years being in damages.
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11. Can I receive rent gross as a non Jersey Resident or is tax withheld?
If you are a non resident landlord with effect from 1 January 2009 tenants of Jersey property or Jersey agents who collect rent on behalf of a non resident landlord are prima facia obliged to withhold Jersey tax at 20% from rents paid to non resident landlords.
Non resident landlords can however apply for a certificate which means they that receive rental payments gross.
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12. Can property be held on trust in Jersey?
A trust of Jersey property is presently not valid. If property is owned by a company the shares in that company can however be placed in trust.
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13. Is there any VAT in Jersey?
There is no VAT but there is a Goods and Service Tax charged at the rate of 5%.
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For detailed advice concerning any of the topics mentioned above, please contact Chris Renouf.
The information and expressions of opinion contained in this guide are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.