Many have heard about operation Overlord, when the allies disembarked in France and opened the second front in Europe. To the west from the place where the historical events happened, there are the Channel Islands, which are less known by general public. But they should be! After all, they are a special jurisdiction, a tax haven and a popular place where super-rich people buy properties – for living, as an investment and for no particular reason.
Edge of the world near the coast of France
Real estate on the Channel Islands is a niche product because of cost and distance from civilization. On the photo: Saint Peter Port is the capital of Guernsey
In a couple of dozen kilometers from mainland France, in the English Channel there are the Channel Islands. But the land is not owned by the French Republic but by the neighboring United Kingdom, which is more than a hundred kilometers away. The largest of the islands, Jersey and Guernsey are Crown Dependencies of the British Empire but they are not officially included in the United Kingdom. They have the right of self-government, they have their own currencies (different!), license plates and domains – .je and .gg.
There are no cars, so you have to walk or ride a bicycle to explore the area. Tourists and glad about it and nature is glad too, as it preserved its pristine. Guernsey
Area of Jersey is 116 square kilometers (it's about 16x7 km), and the island of Guernsey is 1.5 times smaller. Everywhere they respect both English and French, as over 90% of the population speak these languages. And there are 164,000 happy islanders. Real estate on the Channel Islands belongs to niche products because of its high cost and distance from the major centers of civilization. People just relax mind and body here, enjoying nature and unhurried flow of life, and when they want to entertain, they go to the bigger island, which is called the UK, or to the European continent — to France. It takes 1 hour and €200 to get from Jersey Airport to London, and a bit longer and more expensive – to Paris. Between the Channel Islands and coastal cities of neighboring countries there are daily shuttle ferries.
Tourism is the main sector of the economy, along with agriculture and cattle breeding. Saint Peter Port
Locals do not complain about the climate. If even Cornwall in the southwest of England is considered a resort area, the Channel Islands are so much the more. No wonder that tourism is the main sector of the economy, along with agriculture and cattle breeding. People go to St. Helier, the capital of Jersey, to walk through narrow cozy streets, enjoy old low-rise architecture, and then walk to the sandy beach, sunbathe and swim, admire steep coastal cliffs and have a picnic in the vast flowering meadow. Small islands of the archipelago, Sark and Herm, are not for the lazy. There are no cars, so you have to walk or ride a bicycle to explore the area. Tourists and glad about it and nature is glad too, as it preserved its pristine.
The rich buy exclusive and evade taxes
One bedroom apartment in the capital of Jersey costs from €150,000-250,000 and above, and a small detached house in the suburbs costs no less than €500,000. Portelet bay, Jersey
Real estate on the Channel Islands is very attractive for super-rich investors who are ready to pay a lot for the opportunity to live among this splendor. We've already discussed that housing in Jersey and Guernsey is expensive, but now we'll specify details. As stated in Candy GPS Autumn report, a luxury house with four bedrooms on the Channel Islands costs an average of $2,500,000. Experts Candy & Candy, Savills and Deutsche Asset & Wealth Management, who prepared this study, believe that among the islands of the whole world the Channel Islands are on the third place on attractiveness of investment in expensive housing. Other representatives of Europe did not get into top 10 or even top 20 of most prestigious islands.
Source: Candy & Candy, Savills и Deutsche Asset & Wealth Management
During the crisis the real estate market of the Channel Islands proved to be steady and stable. Photo: Gorey Harbour, Mont Orgueil Castle, Jersey
Rich people usually buy property on the Channel Islands in order to move there, that is, a property there will be primary residence. As Jersey and Guernsey have self-government, they offer special conditions for running business. For over half a century they have been offshore zones. The main disadvantage is the income tax of 20%, disregarding whether you are poor or rich. Unlike the UK, where this tax varies from 20 up to 45%. Tax on companies on the Channel Islands is from 0% to 20%, depending on the direction of entrepreneurial activity. In the UK there is a single rate of 21%. VAT in Guernsey does not exist, in Jersey it is 5% and in the motherland it is 20%.
People go to St. Helier, the capital of Jersey, to walk through narrow cozy streets, enjoy old low-rise architecture, and then walk to the sandy beach, sunbathe and swim, admire steep coastal cliffs
Terms and conditions for purchasing property on the Channel Islands are reasonable: stamp duty does not exceed 5%, while the maximum rate in the UK is 15%. But prices are not reasonable. One bedroom apartment in the capital of Jersey, for example, costs from €150,000-250,000 and above, and a small detached house in the suburbs costs no less than €500,000. But that is why wealthy buyers choose the Channel Islands: during the crisis there was no crash in prices, the market proved to be steady and stable. Of course, there is some effect of a close relationship with the mainland: London financial strength is reflected in its satellites.
La Corbière Lighthouse and the rocky coast in Jersey
And actually, when super-rich people buy property on the islands and it is a special type of property, they can have non-economic motives. Yolande Barnes, Director of Savills World Research, says that it could be a spontaneous decision, need to demonstrate their social status, or desire to provide additional place to stay. According to experts, such purchases will be made more often: "The last decade was marked by investments in elite urban real estate, and in the coming decade investments in housing and lifestyle that the islands provide will increase. Top achievements for the wealthy are the exclusive possession of the product, and in this respect island real estate is on a par with luxury property in the best cities."
Text: Kirill Ozerov, ee24.com
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