The States of Guernsey has approved its budget for 2019 and the big news for the property sector is that the government is removing document duty for all bonds.
This means that there will no longer be an administration charge for registering the documents to take out a mortgage, borrow additional money or move a mortgage between providers. The intended effect of this is threefold:
1. First-time buyers will have one less thing to worry about and one less cost to pay when buying their first home
2. People will be able to release the equity in their homes more easily
3. People will be able to shop around for better mortgage rates and change providers more easily
This is good news for the market as it allows people to find the best rate for them and easily switch provider; promoting competition and giving people more choice. More importantly perhaps is what the proposed change means for first-time buyers. For many, this will be the encouragement they need to take that crucial step and get on the first rung of the housing ladder.
The process of buying their first home will be a little cheaper and therefore more appealing. The States of Guernsey’s budget also puts an end to recent speculation around government help for first-time buyers. Those looking to get on the ladder for the first time now have certainty as to what the government’s intentions are and can press on with their plans.
Certainty is always good for the property market so the budget announcement was greeted warmly. It’s worth noting, however, that the removal of document duty for bonds is offset to some extent by an increase in the document duty payable on the purchase of a property.
A budget is always a balancing act for any government so the 2019 proposals were always going to have to take a measured approach towards the property market. The removal of document duty for bonds is a step in the right direction that will give Guernsey’s borrowers more choice and encourage first-time buyers to take that first step onto the property ladder.
The budget will come into force on 1 January 2019. If you’re looking to buy a home in Guernsey, get in touch with the Livingroom team on +44 01481 715555