Home

FAQ’S ON BUYING IN GUERNSEY

ARE THERE ANY RESTRICTIONS REGARDING THE

OWNERSHIP OF A HOUSE?

No, houses can be owned by anyone of any nationality or by a company or Trustees.

ARE THERE ANY RESTRICTIONS REGARDING THE
OCCUPATION OF A HOUSE?

Yes, the housing (Control of Occupation) (Guernsey) Law, 1994, states that occupation of ‘local market’ house is limited to persons either possessing the specified residential qualifications or holding a licence to occupy granted by the States Housing Authority (note that licences often contain restrictions in themselves, e.g. licences are often granted for a fixed period of time or while the holder has a certain job). If you are in any doubt as to whether you have residential qualifications consult your advocate who, if necessary, will take the matter up with States Housing Authority.


WHAT IS MEANT BY LOCAL MARKET AND OPEN MARKET PROPERTIES?

Residential Properties in Guernsey are split into two categories, ‘Local Market’ and Open Market. There are no restrictions on ownership of property, the restrictions are on occupation.
‘Local market’ properties in general can be occupied by locally born people who have lived in Guernsey for a certain period and by people who, whilst not born in Guernsey have lived here for a certain period and whose parents or remote ancestors have lived here between certain dates.
The rules as to whether a particular person can occupy local market property are very complicated and in any case where there is doubt the Housing Authority should be consulted for advice.
Local market properties can be occupied by people not born in Guernsey but who are considered essential to the Island. They are known as Licence Holders. These licences are issued by the Housing Authority and usually issued on condition that the licence holder may only occupy a property above a certain rateable value.
‘Open market’ properties can be occupied by any person whether a local or a non-local resident. Generally they are occupied by non-locals as they are in a much higher price range than local market houses. The price of an open market property starts at around £250,000.
There are various restrictions with open market properties and advice should be obtained before carrying out alterations.










WILL I HAVE TO PAY DWELLING PROFITS TAX?



No not when you buy a house. This tax is levied on the profit made on the sale of a dwelling after various expenses and fees and also an inflationary allowance have been deducted. The tax is avoided completely provided the owner of the house has either lived in the house continuously for twelve months or has owned the house for five years.

WHAT IS THE PROCEDURE WHEN I HAVE FOUND
A HOUSE THAT I LIKE?



When you think you have found the right house, contact the estate agent as soon as possible, and if you wish to make an offer tell the agent your offer is subject to conditions, e.g. survey, loan facilities being approved. If you do not condition your offer you may find yourself in a position whereby a verbal contract has been reached and should you later wish to withdraw, by reason, for example of your survey of Finance facilities being unsatisfactory, you may find yourself obliged to buy, or, if you do not, to pay the Vendor damages.
The agent will then put the offer to his client, and verbal agreement may be reached, possible after further negotiations. If the agreement is reached the purchaser must now ensure that the necessary finance will be forthcoming in respect of the particular property, and he or she must also arrange for a survey to be carried out if required. The agent now draws up "conditions of sale", this being the basic contract of sale, which will incorporate the conditions which are the subject of your offer.









WHAT EXACTLY ARE CONDITIONS OF SALE?


The conditions of sale describe the property to be sold, state who the parties are, the price, the date when the sale is to completed, when possession will be given, and sets out other conditions affecting the sale. The Conditions of Sale is a legal document, and will form a binding contract on the parties when each party has signed, and the purchaser has paid a deposit.

I HAVE JUST COME TO THE ISLAND.
DO I HAVE TO REGISTER MY ARRIVAL?


No. Any requirement to register on arrival in the Island was removed by the 1982 Housing Law. Prior to that date registration was necessary in certain circumstances.


CAN I PURCHASE A FLAT IN GUERNSEY?


Yes. It is possible to become the freehold owner of a flat. The conveying of a flat is more complicated than that of other properties and the Advocates charges may therefore be correspondingly higher. Also, due to technical problems with regard to their taking security some Guernsey lenders will not lend on the security of a flat. Most, however, will, although in most cases, they will not lend the percentage of the value that they normally lend. The survey may also be comparatively expensive as it will need to cover common parts of the building or any other part which could cause problems to a prospective purchaser.


THE LEGAL STEPS

WHY DO I NEED TO EMPLOY AN ADVOCATE?


Because only advocates have the right to prepare conveyances of property in Guernsey. A law was passed many years ago, to this effect, in the interests of protecting the public from untrained persons.






WHEN SHOULD I CONSULT AN ADVOCATE?


A soon as possible when you have decided to buy a house, whether you have a particular property in mind or not. In particular, you should consult an advocate before signing conditions of sale. The advocate’s duty is to look after your interests, and to give you impartial advice. Remember that we as the estate agent are the vendor’s agent, and as such would be looking after the vendor’s interests, however we will always be happy to advise and assist whenever we can. Advocates are bound by a fixed scale of fees, so it will make no difference to the fees if you consult an advocate early or late in the day.



WHAT WILL THE CONVEYANCING FEES BE?


Conveyance fees are high in Guernsey due to the fixed rate of document duty. Document duty is charged on all conveyances at the following rates:
- £0 - £150,000 @ 2%
- £150,000 - £250,000 @ 2.50%
- £250,000 > @ 3%

In addition there are court and registration fees (which are currently £18.00), and the Advocate’s fee is currently based on a rate of 0.75%

In theory these are the minimum fees which advocates are authorised to charge, but in practice, unless there has been a lot of extra work involved, particularly in conveyances of small monetary value, all advocates adhere to the rate.
When calculating total conveyancing costs the purchaser only pays fees on the value of the property, not the value of any personalty (carpets, curtains, light fittings and other moveables) included in the sale. Don’t forget however that if you are selling a property estate agent’s commission will be payable on the total vaue of property and contents.

WHO HOLDS THE DEPOSIT?


Usually either the estate agent or the vendor’s advocate. As the money remains yours until completion there is no reason why you should not ask the person holding the deposit (at the time you place it) to pay you the interest and this is almost invariably the practice.