Jersey's appeal


If it is possible to measure the health and buoyancy of an economy by the number of cranes on the skyline, Jersey seems to be doing well given the cranes seen during the past couple of years.

Investment into Jersey property and, in particular, into office developments in Saint Helier, has continued to be popular, including:

  • the States of Jersey Development Company's Jersey International Finance Centre development, which is soon to be home to UBS AG and BNP Paribas, on the Esplanade; and
  • Dandara's Gaspe House, now home to RBC Wealth Management.

Those developments are not the only ones under construction – there is a range of commercial office development schemes in various stages and a robust pipeline of work sitting behind them, as well as numerous residential development schemes. In fact, anecdotal evidence suggests that the construction sector is the busiest that it has been in the past 40 years.

Recent activity in Saint Helier points to an appetite for high-quality, large-scale investment properties backed by solid covenants.

Even post-Brexit, the volume of activity has continued on a slow but steady upward trajectory – demonstrating that despite the uncertainty, there is underlying confidence in an outcome that is broadly the same as the status quo.

Jersey's appeal

But why does Jersey continue to be so popular for property investment?

Commercial investors are drawn in by a range of factors:

  • Jersey's international financial services sector flattens out peaks and troughs in UK and global economic performance.
  • The island's reputation as a mature and well-regulated offshore centre marks it out as a safe place to invest.
  • The world-class communications and physical infrastructure, along with the highly educated workforce, creates confidence.

That confidence is backed by the steady upwards trend exhibited by prime office rents over the past decade, which have avoided the downturns experienced elsewhere. A robust planning regime, geographical constraints and a lack of speculative development have combined to make for a tight supply of prime space which has traditionally trickled rather than flooded as demand arises.

In addition to the consistently benign market conditions, investors benefit from:

  • longer than average lease duration;
  • UK mainland-style commercial leases;
  • three yearly, upward-only open market rent reviews;
  • an absence of security of tenure and complex landlord and tenant legislation;
  • a predominance of international covenants and UK-backed tenancies;
  • nominal property rates;
  • a pool of first class professional expertise; and
  • average initial yields averaging 6% to 7% over the past two to three years.


For those considering an investment in Jersey commercial property – a broad category ranging from institutional investors to private individuals and family offices – it is important to understand general tax principles. Jersey property income is taxed at 20%, which includes property development. Property income is taxable on the accounts basis and deductions are allowable for revenue-related items in connection with the letting of the property.

Capital allowances are available at a rate of 25% on a reducing balance basis. Capital expenses are not allowable deductions. If rental losses are incurred these can be carried forward; however, excess interest incurred cannot be carried forward.

Income on Jersey property is subject to tax irrespective of the property owner's residence. For non-Jersey resident landlords, there is a scheme whereby tenants deduct rent at source at 20%. If landlords' tax affairs are up to date and remain so, they can apply to receive the rental income gross of tax.


With the market steadily improving, the island is looking forward to increased investment activity across the investment property sector. Maintaining an attractive investment market in the context of the relevant tax principles' impact on investment will be a vital part of this. As such, it is important that planned review of commercial property taxation takes a pragmatic approach, balancing short-term tax gain against the potential knock-on implications for activity, employment in construction and the provision of 'Grade A' office space – all of which predicate Jersey's pitch as a centre for relocations.

For further information on this topic please contact Jonathan Hughes at Ogier by telephone (+44 1534 504 000) or email ([email protected]). The Ogier website can be accessed at www.ogier.com.

An earlier version of this article first appeared in Business Brief.