Guernsey States Finalise 2026 Budget with Key Fiscal Adjustments

Following two days of deliberation, the States of Guernsey have formally approved the 2026 Budget, setting the course for public spending and taxation over the next year.

Among the most significant outcomes is the decision to retain the current level of mortgage interest tax relief, a departure from the original proposal to reduce it.

Earlier last week, a motion to cap spending at 2025 levels was rejected. Had it passed, the proposal would have cut £27 million from the draft Budget presented by the Policy & Resources Committee.

The finalised Budget outlines several notable measures:

• Projected revenue of £768 million, sourced from taxation, fees, and other charges
• Planned expenditure of £749 million, reflecting an increase of inflation plus one percent
• A £4 million efficiency savings target across government departments
• A rise in the personal income tax allowance to £15,200, an increase of £600
• Above-inflation increases to domestic and commercial TRP, motor fuel and tobacco duty, and vehicle first registration duty
• Alcohol duty to rise in line with inflation
• Introduction of a new excise duty on vaping liquids
• Elimination of the additional document duty applied to second home purchases
• An additional £17 million allocated to meet rising demand for public services, with approximately half directed toward health and social care

 In addition, the States endorsed proposals from the Employment & Social Security Committee to enhance non-contributory benefits. Most benefits will increase by 3.7 percent from January, while the winter fuel allowance will rise by 4.3 percent immediately.

 The removal of the document duty surcharge on second homes is expected to have a direct impact on the property market. This adjustment may lead to increased activity in the second-home sector and could influence conveyancing timelines and demand.

 For expert guidance on conveyancing matters in Guernsey, please contact the Guernsey Property Team at F&F LLP by phone: 01481 815050 or by email: conveyancing@ferbrachefarrell.com