Action for Housing welcomes new property sales tax to curb speculation and improve accessibility

A representative of Action for Housing met yesterday with the Minister for Justice, Trade and Industry, Nigel Feetham, at his invitation to discuss the new property sales tax announced during the Budget.

Action for Housing said it welcomed the initiative, as it could help “stabilise property prices” and make homeownership more accessible to local buyers currently “priced out by investors ‘flipping’ properties, and/or other speculatory practices, for substantial profits.”

It said that this practice reduces opportunities for the broader public to purchase off-plan properties at the original prices quoted by developers.
Housing is fundamentally a social need, said a statement from the group.

“The dominance of wealthy off-plan speculators restricts the market, keeps prices artificially high, creates barriers for first-time buyers, and worsens the housing affordability crisis,” the statement said.

“Moreover, if such speculative activities do not contribute to tax revenues on profits or gains, it undermines the fairness of the tax system.”

Adding that as estate agents suggested, a significant number of units in property developments are sold to investors, both local and foreign, who, as Mr Feetham described in Parliament, 'make substantial profits from flipping multiple properties,' thereby 'driving up prices.'

“This practice prices out owner-occupiers on average incomes, making housing less affordable for many,” said Action for Housing.

“Although this new tax measure is a positive step towards helping potential owner-occupiers purchase properties, Action for Housing reiterates that Gibraltar is facing a housing crisis.”

“The government’s priority should be to build more rental stock to accommodate those on the housing waiting list or people with special circumstances, such as divorced men who cannot afford private rentals and are not eligible for the 50/50 scheme as previous homeowners.”