Jersey’s Housing Law was introduced in 1949. Categories of residential qualification are set out in Regulations first made in 1970 in which Regulation 1(1) sets out fourteen grounds of qualification. These include those often grouped together as (a)-(h) which covers people qualified by birth and/or residence along with other grounds such as hardship, and Regulation 1(1)(k) which states that the Housing Minster will grant consent to a property sale where:
(k) the Minister is satisfied that consent can be justified –
(i) on social or economic grounds or both, and
(ii) as being in the best interests of the community
The Control of Housing and Work (Jersey) Law 2012 comes into effect on 1st July 2013 and will replace the current Housing Law and its Regulations. Those who were previously known as 1(1)k residents will come under the umbrella of “Entitled” residents, a category which covers a range of qualified people who can buy and rent homes in Jersey. The underlying criteria will remain the same and they will continue to be required to rent or buy properties above a set value. Jersey’s Director of High Value Residency deals with 1(1)k applications. The post has recently been taken up by Kevin Lemasney who has pledged to work closely with the Locate Jersey team to raise Jersey’s profile as a great place to live and work. This should enable the Island to compete in a more focused way with other jurisdictions such as Guernsey, Switzerland and Gibraltar. In recent years, more high profile wealthy residents have moved to Guernsey than to Jersey, which is thought to be due in part to the open market properties that they are able to buy but also in part because of a perception that Jersey may not welcome wealthy residents to the same extent as other places.
Jersey nevertheless has a very strong offering for those who are prepared to go through the relatively straightforward application procedure. This includes its proximity to the UK and Europe, our health, leisure and education facilities and the availability of world class professional services. We know that the relatively low crime rates are a significant attraction to incoming wealthy residents with younger families.
The subject of 1(1)(k)s arouses mixed views, and negative publicity is all too often generated when the subject comes into the public eye. Wealthy residents bring significant direct economic benefit to the Jersey economy through buying property which they often engage local contractors to improve, and paying taxes without burdening our health or education services. Often overlooked is the even greater benefit that their business acumen and expertise, global experience, and charitable focus brings to our Island.
Incoming wealthy residents have to buy a property for a value of at least £1,000,000. The market for such properties has remained fairly stable over recent years with 20 or so freehold properties being sold each year for values over £2,000,000, to both locally established residents and to incoming wealthy residents. At this level many properties are not officially on the market but agents in the know will be able to direct potential buyers to the right property. Broadlands Estates, where the specialists in properties in this price bracket are Roger Trower and Nigel Hurst, have been involved in over half of all incoming wealthy resident purchases in recent years.
We believe that the number of incoming wealthy residents has been in single digits in recent years, but understand that the Director’s aim is to bring this figure closer to 15 per year as part of the Economic Development Department’s remit to build and boost the local economy. It is understood that the Director’s department will be collating more information about the benefits that wealthy residents bring to Jersey which we believe will greatly assist any future debate on the subject.
Once wealthy residents have moved to Jersey the good news is that they, by and large, settle well, and make real contributions to Island life and its economy. We hope that with the higher profiling of what Jersey has to offer and the availability of information about the benefits brought to the Island by wealthy residents, more people will recognise these benefits.
We believe that the time has come to move the focus away from the claims that occasionally arise that some residents do not make a sufficient tax contribution. Those who came here many years ago may have made tax arrangements at the time which in present day terms appear to be overly favourable, but it is wrong to judge the majority by these exceptions. In these difficult economic times anything that brings benefit to the economy and the property market should be welcomed, particularly where there is no downside as is the case with incoming wealthy residents.
If you would like to discuss any of the above please contact Julie Melia at Ogier Property on +44 1534 514110, Nigel Hurst, Property Negotiator at Broadlands or Roger Trower, Managing Director at Broadlands on +44 1534 880770.