Bricks and Mortar

Gilt-edged Guernsey

Getting away from Gordon Brown's taxes is just one of the advantages, says Mary Gold

THE estate agent who was supposed to be meeting me at Guernsey airport couldn’t make it. “He’s gone off to view an £8 million house,” said his sidekick apologetically. Eight million pounds? On an island five miles square? Yes, as it happens, the property market in Guernsey is buoyant because there’s not that much to buy and those homes that do come on the market are quickly snapped up by the very wealthy. So you can forgive the dynamic Matthew Henry, of Swoffers, whom I met soon afterwards. “Sorry about that,” said he, coming into his office at 90 miles an hour. “Things have gone a bit bonkers lately.”

The reason for Guernsey’s fizzing property market is simple, according to Henry. “People in the UK are very worried about inheritance tax, about indirect taxes on cars, VAT and all the other stealth taxes,” he says. “They reckon the Chancellor is out to get them one way or another.” Guernsey, by contrast, has no inheritance or capital gains tax.

Tax aside, there are other reasons why Guernsey is on a roll. The island is very pretty for a start — plenty of Georgian and Victorian homes built of Guernsey granite and lots of property ripe for renovation. There is a brand-new airport, excellent schools, good weather and restaurants, little crime and the kind of politesse that you don’t see very often in Britain these days, especially in cities.

Then there’s the fact that there are two markets, the local one and the open market. In the Sixties a limited register of open-market homes was established, so that local people wouldn’t be priced out of the place of their birth. The register was closed in 1982 when it reached 1,700 properties, but the number of houses available to local people stands at 23,000, so you can see why it’s hard for outsiders to get on the Guernsey property ladder. Prices have gone up by 58 per cent in the past five years, and the average house price on the open market in 2005 was a staggering £980,000, compared with £221,000 in the South East of England.

Outsiders who buy must live in their home for one year and one day, or own it for five years, before they can sell at a profit. Only about 90 homes come on the market every year, so this is not the place for the sell-it-on-quick brigade — and there are no property bargains. For the size of the island, the population of 62,000 is relatively high — and there are 40,000 cars.

Henry, however, was born there and is a committed islander. “I’ve lived elsewhere, but I haven’t found anywhere as nice as Guernsey,” he says. “Plus, Guernsey has become a lot wealthier in the past 20 years because people have confidence in our financial system.”

Ah yes, the financial system. To find out what’s so good about Guernsey I went to see Michael Ayre, a tax expert at Fortis Reads, who came here from Newcastle upon Tyne 25 years ago. He said: “Our system is much simpler. There’s no inheritance or capital gains tax, stamp duty is 3 per cent, and after 2008 there won’t be any corporation tax. Jersey and Guernsey are on pretty level-pegging from a tax point of view, but Guernsey has a better turnover of housing stock.

“The Isle of Man has good tax advantages, but it’s stuck in the Irish Sea, so it doesn’t have the weather. Guernsey is also much more discreet — people don’t want to know everyone else’s business — and it’s a friendly place with good-quality jobs but not the inconvenience of living in London. I always say to anyone thinking of buying: ‘Don’t just come here for tax reasons, come because you like it.’ The tax benefits are the icing on the cake, but if you come here just for that, then you won’t integrate properly.”

So what is there to buy? Well, apart from that £8 million house, there are smart and ultra-modern homes on the Fort George private estate, with its well-trimmed lawns and perfect sea views. They were a bit too Desperate Housewives for my taste, but the handsome French-style granite houses, with pastel shutters, farther out of town and in the lovely Village de Putron were very appealing.

St Peter Port, with its cobbled streets and shops in ice-cream colours, is a delightful little capital. Guernsey has lovely beaches and a low-key lifestyle; the island’s most famous residents (Guernsey’s Posh and Becks) are the racing driver Andy Priaulx and his wife, Jo, and Douglas and Mary Perkins, who founded the Specsavers empire. It’s hardly Hello! magazine, is it? But that’s just how the people of Guernsey want it, thank you very much.

COURTESY OF THE TIMES NEWSPAPER