FAQs for a first-time property buyer in Jersey
What is conveyancing?
Conveyancing is the process of legally transferring ownership of a property or land. This would be required when you buy or sell a property.
In what order should I go about buying a property?
Whilst there is no particular order, it is probably best if you approach either your bank or a mortgage advisor at the outset. You don’t want to be disappointed to find that you cannot borrow the full amount to buy your dream home.
What types (tenures) of property are there in Jersey?
Jersey has three main types (tenures) of property. Freehold, Flying Freehold and Share transfer.
What is the difference between freehold, flying freehold and share transfer?
The differences are as follows:
- Freehold – one person (or two, such as joint ownership by spouses) owns the land and house outright. As an owner of a freehold property, you are responsible for all or any costs of the property. Freehold owners can do what they want with their property — up to a point.
- Flying freehold – one person (or two, such as joint ownership by spouses) owns the flat outright (a little bit like a freehold). However, the common land and the building, within which the flat is situated, is owned by an Association. All of the co-owners of the flats within the building are members of the Association. As an owner of a flying freehold property, you are responsible for all or any costs arising from the interior of the flat. You will also be responsible for a proportion of the costs associated with the building and common land. Flying freehold owners’ rights and obligations are governed by a document known as a Declaration of Co-ownership.
- Share transfer – one person (or two, such as joint ownership by spouses) owns shares in a company. These shares give you a right to occupy the flat (you do not actually own the flat). The company owns the building and the flat within it. As an owner of a share transfer flat, you are responsible for all or any costs arising from the interior of the flat. You will also be responsible for a proportion of the costs associated with the building and common land and the Company. Share transfer owners’ rights and obligations are governed by a document known as Articles of Association.
First-time Jersey property buyer status
In order to qualify for a concessionary rate for first-time property buyer stamp duty, as a first time Jersey property buyer, you must satisfy all of the following:
- You must have Entitled status, pursuant to the Control of Housing and Work (Residential and Employment Status) (Jersey) Regulations 2013, or be buying jointly with an Entitled spouse or civil partner.
- You may never have owned or been entitled to occupy dwelling accommodation (whether in Jersey or elsewhere) by virtue of having owned or jointly owned that dwelling accommodation (there are exceptions).
- The purchase price may not be less, or substantially less, than the gross value of the property as sold.
- The purchase price must not exceed £500,000.
It should be noted that a person with Licensed (formerly known as j-category) status cannot qualify for any first time concession, and that where a purchase is being made jointly, both parties must satisfy the criteria.
I am a first-time Jersey property buyer, looking to buy a house with my partner. I have been told that there are two types of stamp duty to pay. Is this the case?
As a first-time buyer, you will be required to pay stamp duty (or Land Transaction Tax (LTT) if share transfer) on the price of the property and also stamp duty (or LTT if share transfer) on the amount you borrow from your lender. However, as a first-time buyer, the stamp duty rates will be less than existing property owners within specific price ranges.
I am looking for a property to buy with my partner who is not a first-time jersey property buyer. Do we still qualify for first-time buyer stamp duty concessionary rates?
If you purchase jointly you will not be able to obtain first-time buyer stamp duty concessionary rates.
I’ve been told there are different types of ownership. What are the different ways in which my partner and I can own our home?
There are two ways in which the property can be held, either as ‘joint owners’ or ‘owners in common’. When you co-own a property as joint owners, each co-owner owns the whole of the property and neither owner has a specific or identifiable share. Under ownership in common, each co-owner owns a specific (but undefined) share in the property.
I am getting a mortgage with my partner but I don’t have qualifications to buy jointly. If we split up, can I get my ‘investment’ back out of the property?
There is no simple answer to this. In general terms, you will run a risk if you are on the mortgage but not an owner of the property and you may find it difficult to get back your ‘investment’. You should always consider whether or not to enter into a joint owner’s agreement to deal with such an eventuality.
The legal process for a first-time Jersey property buyer
What is the process?
In a nutshell, we review the contract of sale (amend if necessary), check title of the property, attend on site (to ensure that all the boundaries are correct), ask the Vendor’s lawyer a number of questions, ask questions of certain Jersey agencies and advise you on the legal issues you should be aware of. With share transfer properties we also review the statutory records of the Company.
How long will the whole process of buying a property take?
Jersey conveyancing process usually takes around 3 to 4 weeks. This can vary, however, depending on the length of the ‘chain’ of connected transactions, the complexity of the transactions, the surveyor and your bank.
Do I have to go to Royal Court to buy my property?
If you are buying a freehold or flying freehold property you will be required to attend Royal Court. If for any reason you are unable to attend in person it is possible to give someone your power of attorney, albeit this will involve additional cost and stamp duty.
If you are buying a share transfer property you will sign a contract and, as such, there is no need to attend the Royal Court.
Do you advise us on the condition of the property such as structure, drains and the like?
We are not qualified to advise on such issues. Reference is made to the section on the survey.
Do I need a survey of the property I intend to buy?
If you are borrowing from a lender, they will require a survey or valuation. This is to ensure the property is worth the amount you have agreed to pay for it and they will have sufficient security.
Will I be able to rely upon the survey the Bank obtains on the property to show repairs and/or structural issues?
Generally, a lender will request a valuation from the surveyor. It is quite basic and is to give comfort to the lender that the property is worth the amount you have agreed to pay for it.
What type of survey should I consider?
There are 3 main types of survey available and it is worth considering which type to choose. Talk to your surveyor about this.
- the cheapest option is the valuation (which the lender will require). This type of survey is quite basic and there may not be much information to assist you
- you can request a home buyers report. This is not as comprehensive as a full structural survey but will highlight parts of the property that need further investigation. The surveyor will not inspect unexposed or inaccessible areas of the property, for instance, the roof or below the floorboards.
- you can request a full structural survey. This will provide a detailed report on the structural condition of the building. This type of report is advisable, for example, where the property is of high value or is relatively old.
And don’t forget to consider getting the drains surveyed as well.
If I choose not to have a survey (or rely on the valuation report provided to the lender) and find structural issues and or repairs after I buy the property, can I ask that the Vendor pay for the work?
Once you have purchased the property you are responsible for all or any repairs or work. You will not be able to demand that the Vendor pays for any repairs that are found after purchase.