Land Registry Fees

Summary

The requester asked for details on how Land Registry fees are used and the justification for tiered pricing on the Isle of Man. The Department for Enterprise disclosed that all income goes to the General Reserve, provided 2020/21 budget figures, and noted significant capital investment in digital services.

Key Facts

• Land Registry and Deeds Registry income is directed to the Isle of Man Government General Reserve rather than being ring-fenced for specific expenditures.
• The Treasury sets the annual budget, and expenditure is allocated based on current government priorities.
• The Land and Deeds Registries benefit from central government services such as buildings, utilities, and IT support without making a direct contribution.
• A major capital investment of over £1.5 million has been made in new digital and online services over the last three years.
• Income and expenditure cannot be split between the Land Registry and the Deeds Registry as they operate as a combined service.

Data Disclosed

• £4,492,466
• £467,648
• £13,800
• £1,562,052
• 2020/21
• 2021/2022
• 23 March 2021
• 16 April 2021

Original Request

I would like to submit a Freedom Of Information request relating to Land Registry fees on the purchase of houses and what the fee is used for? Just to clarify i would like to understand what the Land Registry fee is used when obtained from property purchases on the Isle of Man. For example if I bought a property for £795,000 and was charged £9,000 in registry fees. How is that money used with-in Government? Also like to understand what the justification is for a tier layered of Land Registry fees and why the cost of registering differ between say a property of £200,000 and another of £795,000? Kind Regards

Data Tables (1)

Full Response Text

Freedom of Information Co-ordinator 1st Floor, St Georges Court Upper Church Street, Douglas Isle of Man IM1 1EX

Telephone: (01624 682381) Website: www.gov.im/ded Email: anthony.walker@gov.im

Our ref: 1721293 16 April 2021

Dear ###

We write further to your request which was received on 23 March 2021 and which states:

"I would like to submit a Freedom Of Information request relating to Land Registry fees on the purchase of houses and what the fee is used for? Just to clarify I would like to understand what the Land Registry fee is used when obtained from property purchases on the Isle of Man. For example if I bought a property for £795,000 and was charged £9,000 in registry fees. How is that money used with-in Government? Also like to understand what the justification is for a tier layered of Land Registry fees and why the cost of registering differ between say a property of £200,000 and another of £795,000? Kind Regards"

Our response to your request is as follows: I have enclosed copies of the information that is being released to you.

Please quote the reference number 1721293 in any future communications.

Your right to request a review

If you are unhappy with this response to your freedom of information request, you may ask us to carry out an internal review of the response, by completing a complaint form and submitting it electronically or by delivery/post.

An electronic version of our complaint form can be found by going to our website at https://services.gov.im/freedom-of-information/Review .

If you would like a paper version of our complaint form to be sent to you by post, please contact me and I will be happy to arrange for this. Your review request should explain why you are dissatisfied with this response, and should be made as soon as practicable. We will respond as soon as the review has been concluded.

If you are not satisfied with the result of the review, you then have the right to appeal to the Information Commissioner for a decision on; 1. Whether we have responded to your request for information in accordance with Part 2 of the Freedom of Information Act 2015; or 2. Whether we are justified in refusing to give you the information requested.
In response to an application for review, the Information Commissioner may, at any time, attempt to resolve a matter by negotiation, conciliation, mediation or another form of alternative dispute resolution and will have regard to any outcome of this in making any subsequent decision. More detailed information on your right to a review can be found on the Information Commissioner’s website at www.inforights.im. Should you have any queries concerning this letter, please do not hesitate to contact me. Further information about freedom of information requests can be found at www.gov.im/foi.

I will now close your request as of this date.

Yours sincerely

Request 1721293

“I would like to submit a Freedom of Information request relating to Land Registry fees on the purchase of houses and what the fee is used for?

Just to clarify I would like to understand what the Land Registry fee is used when obtained from property purchases on the Isle of Man. For example if I bought a property for £795,000 and was charged £9,000 in registry fees. How that money is used with-in Government? Also like to understand what the justification is for a tier layered of Land Registry fees and why the cost of registering differ between say a property of £200,000 and another of £795,000? Income and Expenditure”

Department for Enterprise response:

The Land Registry and Deeds Registry operate as a combined service. Income and expenditure cannot be split between the two registries. There is not a direct connection between the Registries’ income and their expenditure. The Treasury sets an annual budget which requires all Registry income to be directed to the Isle of Man Government General Reserve. The Government’s annual budget allocates expenditure according to the current priorities of the government. Details of the Isle of Man Government budget are available here https://www.gov.im/about-the-government/departments/the- treasury/budget.

The annual budget set for the Land and Deeds Registries for 2020/21 was as follows:

Income £4,492,466 Employee costs £467,648 Supplies and services £13,800

In addition to the above expenditure, over the last three years the Land and Deeds Registries have made a major capital investment in new digital and online services to the cost of £1,562,052 to date. Further investment is planned for 2021/2022. The Registries also benefit from a number of services provided from Central Government for which they make no contribution. These include:

• Buildings & utilities; • IT services (annual support charges, equipment, servers and networks, internet provision, desktop services, helpdesk); • Financial shared services; • HR support.

Finally, there are numerous advantages to Land Registration, primary among these being that Land Registration provides a state-backed guarantee of title. Once registered, land is indefeasible which means title to that land cannot be called into question. The Government provides compensation for any loss incurred as a result of reliance on the Register, the value of land included in the Register currently estimated to be in excess of £5bn. Where any such claim for compensation is allowed, it will be paid out of the General Revenue.

Fee Structure:

Fees and duties are set out in the following Orders which were approved by Tynwald in May 2019 and came into effect from September 2019:

• The Land Registration Fixed Fees Order 2019 https://www.tynwald.org.im/links/tls/SD/2019/2019-SD-0229.pdf • Land Registration General Fees and Duty Order 2019 https://www.tynwald.org.im/links/tls/SD/2019/2019-SD-0230.pdf

• Deeds and Probate Registries (Fees and Duty) Order 2019 https://www.tynwald.org.im/links/tls/SD/2019/2019-SD-0231.pdf

The Orders addressed an earlier commitment by the Treasury and Department for Enterprise Ministers to provide more support to those with low and middle incomes, and first and second-time buyers. When moving the Orders the Treasury Minister stated:

“Land Registration Fees to provide more support to those with low and middle incomes, and first and second-time buyers. The new model will see a change from charging a blanket fee of £5.70 per £1,000 of value of property, or 0.57%, to a new, tiered model with revised rates of 1% for the first £500,000 in value, 2% for the value exceeding £500,000 but below £3 million, and 2.5% for values above this. Whilst this sounds like an increase, the intention of the model is to be revenue neutral. This is achieved by offsetting the increase in general fees by a broad reduction in fees within the private residential sector. The reduced fee scheme can be summed up as follows. It is a targeted incentive programme being introduced with stepped rates to support owner- occupiers acquiring entry level in mid-tier housing. To maintain revenue neutralities, these incentives will be supported by increases in charges for higher value properties, investment properties and commercial properties. The proposed charges are still, Hon. Members, significantly cheaper than those charged by other comparable jurisdictions. Owner occupiers also: in owner occupiers of properties with a value of less than £1 million qualifying for relief from fees on the first £190,000 of value, thus giving a potential saving of up to £975.50. Also, a saving of £812 for the average owner occupier based on an average property price of £253,000, a discount of over half the current fee – £1,442 at the current rate, £630 at the new reduced rate. This will be a real projected saving to the vast majority of over 80% of purchases in these categories. A concession for couples, in the circumstance where one of the couple is added or removed from the title: as a consequence of marriage, civil partnership, divorce or as a result of splitting up, the fee in these certain circumstances will reduce to a fixed fee of £250, removing a significant expense in the good times and the bad in personal relationships”

A full extract of the Treasury Minister’s comments and other comments arising can be found via Hansard. Please see the attached link to Tynwald Hansard of 22nd May 2019, starting at line 1417 https://www.tynwald.org.im/business/hansard/20002020/t190522.pdf