SCRUTINY

PRESS RELEASE

9th June 2008

Embargoed until 9.30am 10th June 2008

Scrutiny Report on Land Transactions Tax

The Corporate Services Panel has reviewed the draft Taxation (Land Transactions) (Jersey) Law 200- which introduces a land transactions tax (LTT) on residential share property transactions and publishes its report tomorrow.

The States debated the preamble to the draft law on 12th March 2008 and approved the principle of the land transactions tax. It was then agreed to refer the draft law to the Corporate Services Panel for detailed scrutiny of the provisions of the law and their effect. This is the subject of this first report to the States.

The Panel has not sought to re-examine the principle of the law which seeks to establish equity between purchasers of share transfer and freehold properties with respect to the financial costs of the transaction as the principle has already been approved by the States. Instead, the Panel has looked closely at questions related to the extent to which the draft law will cover all share transfer transactions, the operation and administration of the law and the effect of the law particularly on first time buyers.

The Chairman, Deputy Patrick Ryan said: ‘The new tax will bring in additional revenue to the States and we have urged the Minister to consider using this income to provide additional relief to all first time buyers, whether by share transfer or flying freehold, in order to alleviate the well-known problems facing young people in taking their first steps on to the housing ladder.

We have also considered why the share transfer mechanism for dealing with purchase of flats has been uniquely popular in Jersey. We have concluded that the introduction of the new tax represents an opportunity to favour the creation of flying freehold flat developments rather than share transfer in the future and we have asked the Minister to consider this issue in reviewing the discounts available to first time buyers.’

In a subsequent report the Panel will examine the issues involved in extending the tax to cover commercial property transactions. Deputy Ryan said: ‘We have had some initial discussions with witnesses on this issue and we have seen enough to recognise that this is a very complex area. Without prejudging our subsequent review, it is fair to say that the potential revenue yield from taxing commercial property transactions is an important consideration and should provide the Treasury with sufficient motivation to find a workable solution to this issue’.

Ends

For further information, please contact:

Mike Haden

Scrutiny Officer

Tel 441076 or email m.haden@gov.je

Media Interviews (please note that the Chairman is out of the island until 13th June

Deputy Patrick Ryan

Chairman

Tel 07797 715430 or email p.ryan@gov.je

Notes to editors:

Panel Membership -

Deputy P Ryan (Chairman)

Connétable J Gallichan

Connétable D Murphy

Deputy C Egré

Deputy R.G. Le Herissier