Author Topic: Share transfer properties  (Read 278 times)

Offline shortport

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Share transfer properties
« on: November 03, 2017, 01:35:09 AM »
Did anyone read the excellent article in the JEP by Ben Shenton about share transfer properties,mainly apartments.It turns out anyone can buy them,you don't even have to live here.You can't live in them if you dont have quallies but you can rent them out.
Now we know why so many are being built,as investments for absent landlords,many who probably have never even been to Jersey,we will never know.He points out that a way to stop this would be to make it necessary to have quallies to buy a share transfer property.
I hope this happens though I doubt it,it might even see the back of Dandara.But as our government is more interested in money than quality of life I guess it will go on selling out to anyone.

Offline Jerry Gosselin

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Re: Share transfer properties
« Reply #1 on: November 03, 2017, 08:20:52 AM »
Shenton's article is here:

https://jerseyeveningpost.com/news/voices/2017/11/02/comment-selling-the-island-by-the-pound/


There are a lot of points that need to be raised about share transfer flats.

First - when planning applications for new developments are advertised, it does not clearly state whether the flats will be rental or for sale and whether they will be 'affordable' rental (although this term is a joke as even new affordable rentals are too high to be affordable for many people).

For example, here is the main page of the planning application for Dandara's ongoing development of 22 flats at Hastings Terrace, alongside its massive, overpowering 179-flat development on the Metropole Hotel site:

https://www.mygov.je/Planning/Pages/PlanningApplicationDetail.aspx?s=1&r=P/2016/1824


And here is the accompanying news report in the JEP:

https://jerseyeveningpost.com/news/2017/01/05/plan-for-20-new-apartments-next-to-metropole-hotel-development/


You'll notice that neither of the above say anything about the status of the flats being built. They could be for rental or they could be just the latest share transfer investment opportunity for anyone in the world who has the money to buy one of these units. All planning applications should be required to explicitly state these details in the headline of the advertisement where everyone can clearly see them without having to undertake more lengthy research, but currently they don't.

Second - where are the latest statistics to show how many of these new share transfer developments are being purchased by non-residents, indeed are there any such statistics?

Since the introduction of the new Control of Housing and Work Law in 2013, with its accompanying 'Big Brother' population register, there should no longer be any excuses for not being able to have accurate and timely information on the status of every person living in share transfer accommodation but I still have my doubts whether they are monitoring who actually owns the properties and where they are resident. Before the 2013 Law came into force, Ministers had a ready-made excuse for not being able to provide the information, as this extract from an answer given by Housing Minister Terry Le Main in 2008 shows:

Quote
The requirements of the Housing Law do not extend to identifying and controlling investments in share transfer flats. Accordingly, information on ‘large’ investments in share transfer accommodation cannot be provided. On the introduction of Stamp Duty on Share Transfer transactions, this information will be available.

http://www.statesassembly.gov.je/assemblyquestions/2008/deputy%20southern%20to%20housing%20re%20flats%20sold%20in%20jersey%20by%20share%20transfer.pdf


They introduced a land transfer tax (equivalent to stamp duty) on share transfer properties in 2010, although there is still no stamp duty / land transfer tax on share transfer transactions involving commercial property and it is clear from this answer given by Maclean that he has no real desire to change this because it is "an extremely complex area":

http://www.statesassembly.gov.je/assemblyquestions/2016/(9753)%20dep%20renouf%20to%20tr%20re%20application%20of%20the%20land%20transaction%20tax%20to%20share%20transfer%20transactions.pdf


The few answers that I have found relating to the number of share transfer transactions that have taken place since land transfer tax was introduced are as follows:

Quote
The number of share transfer property transactions which attracted Land Transaction Tax (LTT) during 2010 was 582. The Land Transaction Tax paid on these transactions was £1,555,963. In 2011 Tax paid to the end of April was £609,173 on 271 transactions. It should be noted that transactions include the registration of security interests (similar to mortgages), which also attract LTT.

http://www.statesassembly.gov.je/assemblyquestions/2011/deputy%20le%20claire%20to%20tr%20re%20land%20transaction%20tax.pdf


Quote

Land Transactions Tax paid to the Treasury in 2013 relating to the sale of share transfer properties (460 transactions) £959,107.

http://www.statesassembly.gov.je/assemblyquestions/2015/deputy%20higgins%20to%20tr%20re%20tax%20information.pdf


Quote

Land Transactions Taxes paid to the Treasury in 2014 relating to the sale of share transfer properties (553 transactions) £1,255,762.

http://www.statesassembly.gov.je/assemblyquestions/2015/deputy%20mcdonald%20to%20tr%20re%20tax%20information.pdf


The problem with the above 3 answers is that they don't show how many share transfer transactions were first time sales in newly-built developments and how many were owners of existing flats selling on their properties to second or subsequent buyers. Nor do the answers reveal whether the purchasers and sellers were resident or non-resident in Jersey and it is not clear whether a States Member has actually specifically asked for this information recently.

However, an answer was provided in 2008 that was based on an analysis of 840 units of accommodation owned by 25 different property holding companies, including Spectrum and Century Buildings. It revealed that 70% were locally qualified owners, 12% were owners not qualified but resident in Jersey (like the chap mentioned by Shenton in his article), 8% were owners not qualified and not resident in Jersey, 3% were owned by non-Jersey resident companies and 7% owned by Jersey resident companies. The link to this answer is here:

http://www.statesassembly.gov.je/assemblyquestions/2008/deputy%20southern%20to%20housing%20re%20figures%20for%20ownership%20of%20share%20transfer%20properties.pdf


With regard to flats owned by companies, I believe that they are liable to tax at the standard rate of 20% on any source of income derived from Jersey property (rental or development). In fact, I presume the same thing must surely apply to non-resident individuals who own Jersey share transfer flats and lease them out to locals. If that is the case then why can't the Tax Office records be used to get the most recent information? It is now almost a decade since the last survey was conducted and it would be very timely to do another survey today to see if the proportion of non-resident owners of share transfer flats has increased since then. If the situation in the London housing market over the last decade is any sort of an indicator then there has probably been an increase in the number of non-residents purchasing Jersey share transfer property, as it is hard to see why our own housing market wouldn't be attracting the same sort of foreign investors as London.   

Recent answers given by Ministers in the House have either sought to justify the status quo of allowing foreign purchases of these flats on the basis that they add to the number of homes in the private rental sector (see Gorst answer, 2016) or have been completely and typically vague (no surprises - see Routier answer, 2016):

Gorst answer:

http://www.statesassembly.gov.je/assemblyquestions/2016/(9512)%20dep%20higgins%20to%20cm%20re%20impact%20of%20foreign%20capital%20in%20the%20housing%20market.pdf


Routier answer:

http://www.statesassembly.gov.je/assemblyquestions/2016/(9665)%20dep%20c%20labey%20to%20cm%20re%20conditions%20applied%20to%20residential%20and%20employment%20status%20of%20high%20net%20worth%20individuals.pdf


« Last Edit: November 03, 2017, 08:29:07 AM by Jerry Gosselin »

Offline shortport

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Re: Share transfer properties
« Reply #2 on: November 04, 2017, 01:49:55 AM »
Gorst really is a fool if he thinks it is more beneficial for foreigners with no Jersey links to make profit from Jersey buy to let property,than helping local people get on the property ladder.Its all about keeping the price articially high.Even Andium affordable rents are a joke.If they changed the law so that you had to be locally resident to buy a property we probably wouldn't have the situation we have now.

Online boatyboy

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Re: Share transfer properties
« Reply #3 on: November 04, 2017, 05:53:13 PM »
When Andium run out of rental clients watch the law change then. The states treasury directly gets paid £27 million from the rents that Andium collects around £33 million gross ?. The ridiculous reason given for this raid on a department / quango's  income is a fee for acting as guarantor for the loan over ten years of £25 million a year so Andium can invest in new property and assets.

Have you spotted it yet ?

Andium would not need to borrow anything if it was allowed to re invest all the rents it gets. It therefore follows that Andium is borrowing money in order to feed the States treasury.

The same but slightly different. Thousands of small and other business pay a yearly registration fee of £210 to the JFSC. This is another underhand trick to get more money.

The JFCS keeps around £30 to service it's departments costs,  the other £180 goes staight to the states coffers be it the taxman or treasury.

Work it out for yourselves, is this fair and reasonable behaviour or a greedy Government cooking the books ?

To make the market place and Jersey economy more unstable, SoJDC have borrow another £6 million but check out the amount they have actually given back. Unlike Andium the returns from the SoJDC are a disgrace and are dismal. Even worse they are now competing with tax paying private development companies who do pay taxes.

As the out dated expensive and unneeded policy panel of experts tell Senator Maclean, bring in the sewage and waste tax, other wise your finances are heading deep into the red. We also want to be paid like the other consultants milking Jersey.

Boatyboy.
« Last Edit: November 05, 2017, 03:33:05 PM by boatyboy »

Offline Jerry Gosselin

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Re: Share transfer properties
« Reply #4 on: November 21, 2017, 09:13:29 PM »
Following the earlier comments posted two weeks ago on this thread, the States yesterday published a Freedom of Information response which asked for the number of "share transfer residential apartments that have been purchased by non-residents or trusts, companies or any other non-Jersey entity as investments". Read it here:

https://www.gov.je/Government/Pages/StatesReports.aspx?ReportID=3265

To be honest, it raises just as many questions as it answers. It shows approximately a dozen or less transactions each year since 2010, with a high of 22 transactions in 2012. That seems a bit low. By comparison, the figures I quoted in my post of 3rd November showed hundreds of transactions per year "relating to the sale of share transfer properties". Maybe a lot of these transactions from my own quoted sources related to the registration of security interests? Plus they presumably included all transactions, whether made by Jersey residents or not.

Moreover, this week's response is an updated version of a response published in December 2015, quoting the same figures. In that original response, question B asked for share transfer transactions made by "companies, trusts, investors" but the response said that the Treasury and Resources Department did not hold the information as requested. In the new request, the person has asked for purchases by "non-residents or trusts, companies or any other non-Jersey entity as investments" and the States has provided the same figures as in the first request, but updated to include the past 2 years, only this time it has not said that the Treasury doesn't hold the information - confusing. Perhaps that means that the number of transactions they have quoted each year can't differentiate between companies, trusts and other entities?

By the way, I think I searched past FOI responses when I did my original research 2 weeks ago but didn't spot the December 2015 response, probably because the headline title doesn't include the words "share transfer". Link to the 2015 response here:

https://www.gov.je/government/pages/statesreports.aspx?reportid=1792


To sum up, I think the current share transfer transaction statistics are not anywhere near detailed enough and there appears to be a lack of interest among States Members to demand clearer and more defined figures. It is up to the public to keep raising this issue if they think it is important enough. States Members don't regard it as a priority but they would soon change tack if they thought enough of us were concerned about it, particularly with an election just months away...

Offline shortport

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Re: Share transfer properties
« Reply #5 on: November 21, 2017, 09:57:00 PM »
Does seem very low to me,especially as many of these new build apartments are aimed at buy to let investors.
So if overseas buyers really are thin in the ground they must be being bought by local investors.Local investors with a vested interest in keeping rents high,even andium homes with their rents at 90% of market value for affordable homes is a joke.
so the next questions to be asked is how many share transfer properties are owner occupied and how many are rented out.Mind you this might give us a false impression as I've heard a high percentage of properties are not bought with a buy to let mortgage,just a normal one.