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Residential Property in Guernsey


Buying Property in Guernsey

Building Plots

A limited number of building plots are available each year for anyone wishing to build, but these are generally builder tied and part of a small estate of properties (or Clos). Any individual plots are generally sold with an 'In Principle' of detailed planning permission from the Environment Department. Your Advocate (lawyer) will normally recommend that this aspect be fully investigated before committing to the purchase.

Existing Properties

There are over twenty four estate agents on the island who can provide details of properties on the market. Be warned however, that property prices are far from cheap. Freehold flats start at around £150,000 and first time buyer houses quickly rise above that figure to around £190,000. Many desirable local market properties are now more expensive than Open market ones, as the latter market is more likely to be influenced by political scene in the UK, than by scarcity.

Building Regulations

Building design and standards are strictly controlled by the Environment Department and Building Control. Building regulations are broadly similar to the UK. As with any planning authority, the Environment Department have a delicate balance to keep, between allowing improvements versus preserving the character of the island. Most feel that they have done a good job over the years with extensive use of granite stone fascias and any office block developments in town, following traditional pitched roof designs.

Survey

It is recommended that a structural survey is undertaken by a qualified firm of building surveyors if buying an old property or there is some doubt as to the property's stability. Otherwise most purchasers will obtain a House Buyers Survey in a format recommended by the Royal Institute of Chartered Surveyors, which is a detailed inspection and valuation. This will normally be relied upon by a lending bank if it is addressed to the bank and copied to the purchaser.

Legal process

The conveyancing system in is similar in many respects to the Scottish one and has worked very well for many decades. When you buy property in Guernsey, you do not strictly speaking own  it but merely 'an estate of inheritance', or the right to occupy it. All property is owned by the Crown.

Within a short period of verbally agreeing a price, the following steps occur:

1) Conditions of Sale are drawn up by the Estate Agent using a standard form of wording. The purchaser's Advocate will ask to check the terms, which can include items such as "subject to a satisfactory survey and legal title".

2) The buyer pays a non-refundable deposit of 10% which is normally held by the Estate Agent in an escrow account.

3) Approximately two to four weeks later, legal completion of the conveyance takes place. Normally this involves both parties physically appearing in the conveyancing court (Tuesdays and Thursdays) in the presence of the purchaser's advocate or conveyancing clerk.

4) On completion, the keys are handed over. The title deeds are sent to the new owner by their advocate as  few weeks later once the conveyance has been registered at the Greffe, the island's central land registry and public records office.

5) On completion the following fees are payable:

Estate Agent commisssion 1.5% to 2% 
States Document duty up to 1% of the Realty value but see table below
Conge (triezieme)* 2%
Legal 0.75%


*Conge is a relic of the feudal system when one thirteenth of the value of the property was payable to the Seigneur of the Fief (Lord of the Manor).  In the 17th century it was reduced to 2%. Since 1980, Conge has been payable to  the States of Guernsey as it was no longer appropriate to pay a 'tax' to a private individual.

In 2001 the cost of buying property in Guernsey which has traditionally quite high, was reduced following the States decision to reduce Document Duty by 0.5%. They also resolved to phase out Conge although this will take some time to do as an alternative tax needs to be decided upon. This may be in the form of higher Occupier rates which are very low compared to for example, the UK.

States Document Duty (new lower rates from 2001)
Up to £100,000 zero (as before)
£100,000 to £115,000 zero (formerly 0.5%)
£115,000 to £130,000 0.5% (formerly 1%)
Over £130,000 1% (formerly 1.5%)


In general terms, total conveyancing fees (excluding Estate Agent fees) are:

First £3,000 5.25%
£3,000 - £20,000 4.25% (4.75%%)
Thereafter 3.75% (4.25%)


If a mortgage is being taken out, the bank will register a Bond (a legal charge). The cost is 0.5% of the value of the bond.

Insurance

Buildings insurance cover must be arranged from the date of completion and be for the full replacement cost of re-instating the property and clearance of the site, in the event of complete destruction. Your surveyor will normally assess the cost of re-instatement at local rates. The insurance company or insurance broker will also be able to give guidance on local re-building costs on a per square foot or metre basis.

Contents insurance should also be taken out for the full replacement value . Again an insurance broker will be happy to give assistance on how to calculate this figure.

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