The Housing (General Provisions) (Jersey) Regulations 1970 provide for wealthy applicants to secure Jersey housing qualifications pursuant to regulation 1(1)(k), and the right to purchase property in the Island, on the condition that consent "can be justified on social or economic grounds". These applications are colloquially referred to as "1(1)(k) applications" and are referred to as such in this Briefing. It is the strategy of the Island's government to encourage 1(1)(k) applications to Jersey from suitable applicants.
The Housing Minister has the discretion to decide whether or not to grant a consent under regulation 1(1)(k). Consent is normally issued to a prospective wealthy immigrant once the Housing Minister is satisfied that the applicant will make a major contribution to the Island's tax revenues if permitted to reside in Jersey. Each application is measured on its individual merits, with the guidline minimum annual tax contribution being expected to be no less than £100,000.
The criteria against which 1(1)(k) applications are currently measured are as follows:
(i) the probable contribution to tax revenues;
ii) the business/social background of the applicant;
(iii) the number of dependants of the applicant and the extent to which these persons may in time acquire housing rights if consent is granted;
(iv) other, non-economic, benefits which the Island may receive if consent is granted;
(v) the total net worth of the applicant; and
(vi) the possibility of the applicant bringing a business to the Island which will generate tax revenues and provide employment whilst not adversely impacting upon the Island's resources.
A prospective applicant will have to give some consideration to what he will in fact be paying to the Island's authorities by way of income tax. All Jersey income would be charged at a rate of 20% subject to personal allowances. The first £1,000,000 of non-Jersey income is charged at a rate of 20%, the next £500,000 of non-Jersey income is taxed at 10% and any non-Jersey income over the sum of £1,500,000 is charged at the rate of 1%.
The Island's authorities will seek to obtain assurances from a new applicant that he will pay income tax in the minimum sum of £100,000 per annum. Given the various taxation bands, consideration will need to be given to whether income is Jersey income or non-Jersey income and, in addition, to the potential impact of double taxation treaties and other legislation to which an applicant may be subject.
The application for a consent under regulation 1(1)(k) is a two-stage process. In the first instance, the applicant must apply to be approved as a 1(1)(k) resident. Once this approval is obtained, the applicant will then apply for consent to purchase a particular property.
Purchase of property following the granting of 1(1)(k) status
A successful applicant will be of the same status as other residentially qualified Islanders and can be employed and employ and set up his own business in the Island.
A successful applicant will be expected to purchase a single residential property worth in excess of £1m. He may not purchase a second residential home on the Island.
However, a successful applicant will be permitted to start a business or acquire additional property in the Island, where such property is purchased for investment purposes, such as commercial properties (including properties comprising multiple dwelling units such as lodging houses and blocks of flats), and where it is purchased in the name of a company.
Children of a 1(1)(k) applicant will acquire residential qualifications in their own right, either to rent or buy property in Jersey, once they have completed an aggregate period of ten years residency and are aged 18 or over.