Calls for Guernsey to build housing for UK 'tax migrants' escaping Labour tariff increases

A Guernsey think tank believes UK residents may look to move to lower tax jurisdictions, such as the Bailiwicks, to avoid potential cost increases. Credit: ITV Channel

Guernsey should build tower blocks for wealthy UK migrants, a local think tank suggests.

The Guernsey Policy and Economic Group believes the island could capitalise on tax-driven migrants who want to avoid possible tariff rises from the new Labour administration.

The Group states: "The arrival of a Labour Government with a firm intention to raise UK taxes means that the wealthier can preserve a lot more of their wealth by leaving the UK and heading here.

"These tax-driven migrants can generate a lot of tax revenue for Guernsey. They will pay lots in property and income taxes and their wealth will improve the economy."

Under current laws, only around 1,500 properties are available for those with a British or Irish passport with the right to work in the UK.

These 'Open Market' properties carry a price premium to attract high-net-worth individuals.

Despite a lack of housing in Guernsey, estate agent Stuart Leslie believes high-worth individuals will not occupy 'Local Market' homes.

He explains: "I think there can be a slight negative connotation with people coming to the island.

"It’s not always seen as a favourable thing, but this is a very restricted housing market and [UK migrants] are buying in the top tier of pricing."

"The majority of people looking to relocate to Guernsey for financial reasons would fall into the Open Market housing bracket." Paul O'Neill Credit: ITV Channel

While it remains to be seen what tax hikes UK Chancellor Rachel Reeves could announce in her Autumn Budget, people in Guernsey are closely following to see whether UK residents will be incentivised to relocate.

Tax expert Paul O'Neill said: "The headlines in the UK are that there is going to be an increase in Capital Gains Tax.

"There may be an increase in Income Tax, changes to the pension regime and also there's been very well documented, proposed changes to the Inheritance Tax Scheme which may catch more people in the future."

Jo Goddard from Locate Guernsey, a company which helps people move to the island, says they are receiving around four calls a day from UK residents when the topic of wealth and Capital Gains Tax is mentioned.

She adds: "As soon as the word tax is mentioned in any news report in the UK, then we do find that the enquiries increase.

"We had a lot of enquiries back in 2019 when there was the threat of a Labour government, but actually this year has been quite extraordinary."

How does Guernsey's housing market operate?

  • Guernsey's housing market currently runs on a two-tier system.

  • The majority of Guernsey properties appear on the 'Local Market'. Those eligible include residents born locally and employment permit holders who provide 'essential' work for the island.

  • The 'Open Market' makes up around 7% of island properties. Anyone with a British or Irish passport with the right to work in the UK is eligible for this type of housing. Those who do not hold one of these passports need to apply for immigration clearance.

  • 'Open Market' homeowners have the right to live and work in Guernsey indefinitely.

  • However, 'Open Market' houses usually come at a price premium to attract high-net-worth individuals.

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