ISLAND NATION

Often misrepresented as somewhere only the rich are welcome to live, the Isle of Man in fact offers a wealth of opportunity for a wide range of property investors.

IN THE POPULAR IMAGINATION TAX HAVENS ARE ALL ESSENTIALLY THE same: exclusive enclaves peopled by the seriously wealthy, their shores made deliberately inaccessible to all but the highest earners. But while that might be true of the Channel Islands, where residency is mainly restricted to those with local ancestry or a high income, the UK’s other famous offshore financial centre plays to a very different set of rules.

The Isle of Man is a frequently overlooked outpost of the British Isles, and is actually a self-governing kingdom with its own parliament (the Tynwald). It’s in the Irish Sea, tucked neatly between Ireland and northern England and has become a beacon for the financial services sector, thanks mainly to its fantastic tax breaks for residents and businesses. Income tax is levied up to a flat rate of 18 per cent, with a cap at £100,000 (€133,000) even for those earning millions. Plus, there’s no capital gains for businesses or individuals and no inheritance tax.

It’s therefore surprising that more wealthy people haven’t made the Island their primary home. Famous residents have included F1 driver Nigel Mansell, comedian Sir Norman Wisdom, TV presenter Jeremy Clarkson and current World Champion biker James Toseland, but the location mainly attracts corporations. Financial services, software companies and online gaming all have a big presence here, along with a reasonably large manufacturing base. And good tax breaks mean the film industry is often on location too. However, some clued-up ‘ordinary’ folk have also realised the benefits of life on the Isle of Man. And the perks aren’t just financial – the Island is beautiful with sandy beaches, rolling hills and fishing villages. Many new residents are also attracted by the idea of returning to a close-knit community with a low crime rate.

With its close links to the UK, the Isle of Man allows free movement and rights of residency to any citizen of an EU member state, and anyone can buy any type of property, unlike in Jersey, where non-nationals are granted permission to buy based on income. So if you love pretty coastlines, clean air and glorious countryside you can put down a deposit on one of the many charming cottages, Victorian conversions or modern apartments available.

“There are many misconceptions about the Isle of Man,” says Chris Corlett, chief executive officer of the Island’s Department of Trade and Industry. “We’re often lumped with Jersey but opportunities to live and own property here are open to all. We have a diverse international economic base, a low population for the land available and offer significant tax advantages.”

Corlett says that anyone wanting to work will need to apply for a permit, but generally these are not hard to get. As well as being an offshore location for many well-known financial services providers, the Island is home to entrepreneurs who run their businesses from it. The location is also popular with retired people wanting to reduce their tax liability.

“Less than half the population was born on the Island,” explains Corlett, who as a native Manx is in the minority these days. “We are very much an international business centre and that means we’re not solely interested in welcoming a small number of high net worth individuals, but also people in all demographic groups.”

The need for new blood is high as there are plenty of jobs in all sectors and, according to local businessman David Bush, there are too few workers to fill them. “Setting up a business can be difficult because there is such competition for staff,” he says. “It took me six weeks to find people and that also pushes up labour rates.”

The majority of residents live in two main areas – around the capital Douglas and the town of Onchan, with smaller towns scattered along the coastline. Castletown, the former capital, is an historic centre with a medieval castle and heritage buildings. On the west coast, the fishing town of Peel has a new marina and a traditional Manx atmosphere, while in the north, Ramsey’s quiet coastal ambience attracts retirees.

Because the Island is increasingly appealing to better-off buyers, property costing more than £1m (€1.3m) isn’t unusual, although, according to Neil Taggart of Chrystals Estate Agents, there is a lack of supply of luxury homes to meet demand. “Up to £450,000 (€600,000) the market is strong, but between £450,000 (€600,000) and £800,000 (€1m) properties are scarce,” he explains. “There has been some concern that high net worth individuals may have come to the Island looking to purchase, only to leave having found there was a shortage of suitable properties.”

David Bush agrees that there may be less choice than in other tax havens, but says you can get much more for your money: “£350,000 (€470,000) would buy you a four-bedroom house with garage.” However, he is aware that there are issues with the very rich being unable to find what they want. “We’re not overloaded with high-end property, but the rich want luxury homes and that needs to be addressed.”

He admits that the weather isn’t as warm as Monaco or the Channel Islands, being more like Ireland, but claims this is more than made up for by the lack of crowds, great infrastructure, lower cost of living and all-round better quality of life.

Unlike Monaco or Jersey, a large proportion of homes are surprisingly affordable. According to Neil Taggart, the average price of a standard family house in 2007 was £281,000 (€376,000), a rise of 10 per cent on the previous year, and it’s possible to find attractive apartments in Douglas, the Island’s urban and economic centre, for upwards of £140,000 (€190,000), with larger, family homes from around £200,000 (€270,000). Less attractive two- and three-bedroom houses can be found in Onchan from around £180,000 (€240,000), with something offering more character or land from £200,000 (€270,000), while in Peel a traditional terraced cottage will set you back from around £170,000 (€230,000).

The popular port of Ramsey offers apartments in new and refurbished character buildings from around £150,000 (€200,000) for one or two bedrooms, with terraced houses in the Island’s smaller villages starting from around the same price. A budget of £250,000 (€330,000) to £400,000 (€530,000) will buy something desirable, from a spacious, detached bungalow with good sea views to a five-bedroom Victorian townhouse or a country cottage.

New apartments tend to be in attractive central or coastal locations, built to blend in with the local area and costing on average £150,000 (€200,000) and upwards. There is also a stash of chic, contemporary new builds aimed at the top end of the market. But these are likely to set you back from around £250,000 (€330,000) to over £300,000 (€400,000) for a penthouse with sea views.

Neil Taggart says that although the Isle of Man is increasing in popularity with a new breed of buyer there are issues with redevelopment that need to be sorted if the Island intends to attract more overseas residents. “The rejuvenation of Douglas centre continues to be a hot topic,” he explains. With regard to the property market, however, he sees little to worry about. “The Manx housing market remains strong, fuelled by local economic growth and market scarcity… property continues to be a driving force and a benchmark of success in the Island economy.”

As for David Bush, he’s happy he has found a place that offers a choice of wide, open spaces, financial perks and the opportunity to build a successful business. “Communications here are second to none, it’s a civilised part of British society,” he says, “and the roads are excellent – outside the villages there are no speed limits!”

FOR INFORMATION ON THE ISLE OF MAN, VISIT www.ISLE-OF-MAN.COM; FOR PROPERTY, CONTACT CHRYSTALS ESTATE AGENTS ON 01624 623778 OR www.CHRYSTALS.CO.IM

WORDS BY LAURA LATHAM