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20/20
MONEY MATTERS
Thinking of buying
in Jersey?
by Chris Philpott,
PROPERTY PARTNER,
Carey Olsen Jersey
A FEW THINGS TO CONSIDER!
Purchasing a residential property in Jersey is recognised as mortgage. Unfortunately, some banks have recently changed
being a daunting experience, as it can be in other their loan-to-value requirements and are not necessarily
jurisdictions. It is often the unexpected issues that add to lending as much as they were. It follows that the amount of
the anxiety, and some of the local terminology can also be money you may need to provide as a deposit could be more
confusing. Here are a few practical things you should know than you think. Whether you are dealing with your bank
or consider before deciding to purchase a Jersey property; directly, or using one of the local mortgage advisers, make
sure you are fully aware of the types of mortgages that are
1. Types of Property Transactions available. Getting preliminary approval for your funding
A basic understanding of the types of residential property before starting to look at properties is very sensible.
you will encounter in Jersey is useful. Generally these can be Understanding your monthly repayments is important, but it
divided into (i) freehold, (ii) flying freehold; and (iii) share is also essential to know the bank's arrangement and other
transfer. fees, especially penalty charges for early or part repayment.
These have all increased significantly over the last six
If you are purchasing either a freehold property or a flying months as a consequence of the current economic climate.
freehold property, completion takes place by passing a
contract before the Royal Court of Jersey on a Friday 4. Other Fees and Costs
afternoon. The contract sets out full details of the property Preparing a budget and having an understanding of the likely
and all the rights/restrictions affecting it. It is the buyer's costs that will be incurred when purchasing a property is
advocate who is ultimately responsible for undertaking all essential. This allows you to know your price range and to
title and other enquiries relating to the property. The seller's properly assess any offer you may decide to make.
advocate is responsible for dealing with any queries which Stamp duty is the cost which is often overlooked by potential
are raised. Both the seller and the buyer (or their buyers. It is a tax levied by the Treasurer of the States on every
representatives) must be present in Court when the contract contract passed before the Royal Court, and is payable by the
is passed. This unique procedure dates back to 1602. buyer. Rates are tiered depending on the value of the property
Share Transfer properties are quite different and do not being purchased. By way of example, at the current rates, a
require a contract to be registered before the Royal Court. buyer purchasing a property for £500,000 will have to pay
That is because a buyer purchases share(s) in a company just over £8,000 of stamp duty. Stamp duty is also payable by
which owns the property, rather than purchasing the land a buyer/borrower when the bank takes security over the
itself. Attached to those share(s) will be exclusive rights to property. This is calculated at the rate of 0.5% of the amount
occupy a specific unit at the property, which rights are set of the charge (or "hypothec") secured against the property.
out in the company's constitutional documents.
Stamp duty is not currently payable on share transfer
2. Are you "qualified" to purchase? transactions, but this position may soon change with the
Any transaction involving the sale or purchase of a freehold implementation of the draft Taxation (Land Transactions)
or flying freehold property in Jersey requires the written Jersey Law 200-.
consent of the Housing Minister. If you have not previously
been involved in a Jersey property transaction you will need 5. Choosing your Legal Team
to satisfy the Housing Minister that you are duly qualified to Given the rather complex nature of the Island's conveyancing
own and occupy Jersey property under the Housing (Jersey) system, a potential buyer is well advised to appoint legal
Law 1964 and associated regulations. You will need to do advisers as soon as possible. Whether it is for preliminary
this even if you were born in Jersey. It is sensible to make advice on a potential property, making enquiries of the
preliminary enquiries with the States of Jersey Population Population Office, or providing a breakdown of the likely
Office to confirm your residential status "in principle" before costs and timescales involved in a given transaction,
finding a property. A formal application for housing consent instructing the right legal team at an early stage can save
will need to be made once your offer has been accepted on considerable time, money and anxiety.
a property.
At Carey Olsen, our dedicated property team welcomes the
3. Obtaining a Mortgage opportunity to advise potential new purchasers at the earliest
The key issue for potential purchasers is to secure a stages of their deliberations.
20/20 forty eight
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