NEWLY-BUILT residential properties can no longer be bought through share transfer without permission, the Deputy Chief Minister has ordered.
Senator Lyndon Farnham approved the move as part of a ministerial decision.
It forms part of the government’s Creating Better Homes Action Plan.
Jersey’s share-transfer mechanism was set up decades ago to circumvent shortcomings in the Island’s conveyancing laws but its use for new properties became questionable following the establishment of the ‘flying freehold’ provision.
The share-transfer system allows non-Islanders to buy properties in Jersey through a company and are therefore not governed by laws preventing anyone who has not lived here for at least ten years from buying a ‘qualified’ property.
In recent years, the mechanism has also faced criticism from States Members who say it lacks transparency – with buyers able to use a company name rather than their own.
In a report accompanying a ministerial decision, it says: ‘The ability of a non-locally-qualified person to purchase share-transfer property has been identified as a possible contributory factor to the current high prices and rapid inflation within the housing market.
‘The ability to market properties away from the Island has been seen as an advantage to developers to ensure all units would be sold and investors would continue to have confidence in the market. However, current market conditions suggest that it is unnecessary to provide for off-Island sales as there is considerable unmet demand within the local market.’
It adds: ‘The department [Infrastructure, Housing and Environment] recommends to the Chief Minister that the conditions attached to permissions granted under Article 20 of the Control of Housing and Work (Jersey) Law 2012 should be amended with immediate effect to ensure that all residential units created by a company are sold, at the end of the development, by way of a freehold transaction to persons with an appropriate residential status.’
The recommendation was approved by the Deputy Chief Minister.
Existing properties can still be sold without permission using the share-transfer mechanism.