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I am not supportive of the Open Market one present levy tax supported by distinguished successful entrepreneur Mr Guy Hands despite his ability at wealth creation.
Although the tax idea might work with properties worth substantially over two million, if applied across the board it runs the risk of being unfair, discriminatory and against economic growth.
I speak from a childhood background as the child of Open Market Parent residents too.
My main reasons for opposition are:
1. The Open Market is a broad category of housing covering over seven percent of our population. Open market residents or tenants can be fixed income pensioners, catering workers, retail staff etc. Only a small proportion I suspect are high net worth individuals.
2. We run the risk of potential Human rights judicial review litigation from aggrieved owners
3. A price reduction and loss of confidence in sale prices would severely effect the buoyant real estate agency and construction markets and worse lead to significant document duty fee tax income .
4. It runs the risk of being seen as a French style wealth tax going beyond income tax or TRp .
5. It is a blunt fiscal instrument taxing some people who just own a property proportionally more than asset rich people with diverse global portfolios etc
6. The idea doesn't initially encompass Alderney .as nearly all properties on the northern isle are in a sense open market logically every householder owner on Alderney would have to find an additional several thousand per year, another burden on an isolated community that has Lower average incomes than Guernsey.
7. Any additional random charge like this on thousands of home owners risks reduction of spending on Guernsey sales and services including cleaners gardeners builders interior designers etc.
Pictured: Guy Hands proposed an Open Market tax but Deputy Gollop says it's not a good idea.
Moreover regardless of the merits of the idea, it has sent a shock wave through the open market residents Community. We do not need any more instability.
The Open Market is an underused resource to attract new workers employees and entrepreneurs, digital nomads and younger people to Guernsey. The last thing a growth strategy of business and digital connectivity and demographics need is extra tax.
Secondly, each one percent would presumably be based upon the property value. That in changing markets would keep estate agents and surveyors busy leading to cost inefficiencies and disputes and if values dropped due to the policy it would equal less tax income.
John Gollop is a Deputy in the States of Deliberation
