Sark is a tiny Channel Island located between France and England with a bit over 500 inhabitants.
The Crown is responsible for foreign and defense policy. For all other matters, Sark is sovereign.
There isn’t any income tax, inheritance tax, capital gains taxes, etc. There is a simple property tax which depends on the size of your dwelling.
Anyone from the UK or Ireland can move there and benefit from such tax rates. It’s much harder for people from other countries as it would be like moving to Jersey of Guernsey.
To ensure the sustainability of this small community the Seigneur, the head of Sark, is embarking on plans to rejuvenate and grow the population of the island. Big plans are being worked on.
I expect Sark to be making headlines in the coming years. You’ll have first heard about these plans here.
I first interviewed Swen on Sark a few years ago.
He is also selling a book on moving to Sark.
To a World of Opportunities,
The Wandering Investor.
If you want to read more such articles on other real estate markets in the world, go to the bottom of my International Real Estate Services page.
If you want to discuss your internationalization and diversification plans, book a consulting session or send me an email.
Transcript of “Sark Island – a secret low-tax haven in Europe”
LADISLAS MAURICE: Hello, everyone. Ladislas Maurice from thewanderinginvestor.com. Today, I’m in Prague with Swen and with Christopher. Gentlemen, how are you?
CHRISTOPHER: Very well.
SWEN: Very well. Glad to be here.
LADISLAS MAURICE: We were at a very interesting conference here in Prague. And the reason we’re making this video was that the first video on my YouTube channel, almost three years ago or so, was about the island of Sark. Sark is a tiny island between France and the UK. And it has a very interesting and unique status which is of interest to people who like to live with more freedom and lower taxes. Swen, can you give us a little bit of a background on the island of Sark?
SWEN: Yes. Two-and-a-half years ago, we spoke about an opportunity that existed at the time to move to an island that is self-governing, English-speaking, politically stable in Western Europe, and which didn’t have enough residents. It literally had abandoned properties all over the place. And I started a campaign to bring people in. You were one of the people who, through the YouTube channel, contributed to the significant influx of new residents that we had at the time. We also had a great time talking about it and have been friends ever since.
And for the occasion of a conference, to which I also brought the Seigneur of Sark along, Christopher is the head of state. And I thought this is too good an opportunity, even though we’re not yet fully ready to unveil what we’re planning for the future, it’s too good an opportunity to not have the two of you primarily really speak about Sark, because instead of me just speaking about it, you can take it from the head of state, the 23rd Seigneur of Sark.
What is special about Sark Island
LADISLAS MAURICE: Christopher, can you, please, elaborate a little bit on the island of Sark, because most people are absolutely not aware of that beautiful but tiny island?
CHRISTOPHER: Okay. As we said, we’re very, very close to France. We have the modern history that goes back into Elizabethan times. At that time, we were granted a charter to look after the island on behalf of the Crown. And that’s what we still do. We still have this very neat relationship with the Crown of England. And as long as we don’t muck up, we are able to guide our own path through modern world.
LADISLAS MAURICE: What do you get to decide versus the Crown?
CHRISTOPHER: We get to decide exactly how we go about living our lives. Principally, it’s about setting your own taxation levels, what services you provide for the people that live on the island, all of which is governed under the umbrella of the UK. But nonetheless, we’re separate. We pay no dues, we get no compensation from the UK, we chart our own course. And that makes us pretty unique in the United Kingdom.
LADISLAS MAURICE: So essentially, defense policy and foreign relations, UK, the rest, you?
CHRISTOPHER: Yeah. Just about.
Taxes on Sark Island
LADISLAS MAURICE: On average, what are the tax rates on Sark?
CHRISTOPHER: No income tax, no corporate tax, no inheritance tax. We have a simple taxation on property. We have a simple taxation on personal thing, and those are the two principal taxes. There are three very small other taxes that relate to the island, but you won’t know you’re paying them when you pay them.
LADISLAS MAURICE: Very interesting. There aren’t many jurisdictions nowadays, so Tier A jurisdictions in terms of safety, in terms of everything, where you can live and pay so little in taxes. How many people live on the island?
570 inhabitants on Sark Island
CHRISTOPHER: Well, the census was taken last year, and the results have just been published. And it said there were 572 people living on the island at the time of the census. That sort of seems about right. But it drops in the winter. So the islanders that have been working all summer tend to go away in the winter for their holidays, and that puts an enormous amount of stress on the systems that work in the island. So the shop struggles when it doesn’t have enough customers. And if the island migrates in the winter to go somewhere warmer, then that puts a strain on those of us that are left behind.
LADISLAS MAURICE: You and Swen launched a campaign approximately three years ago to try to encourage people to move to increase, essentially, the critical mass of the island, increase the durability and resilience of the island and offer more services with more inhabitants. I know, Swen, that you did this right before Brexit when EU people could still move to Sark easily. You just needed to go there as a German, as a Frenchman and just register on the island just as you would in the United Kingdom and the rest of the United Kingdom. But after Brexit, this changed, Europeans cannot just move to Sark easily.
Adapting to life on Sark
LADISLAS MAURICE: Of the Europeans who moved or the foreigners who moved to Sark, how many actually stayed versus how many left? Because I can imagine that the churn rate would be relatively elevated, because the idea of Sark sounds amazing, but once people actually move to an island with 500 people, where the weather is questionable, may I say, at best, [laughs] many people would just not be able to stand it because it just wasn’t right for them in the first place.
SWEN: I think, actually, the reason why some people left was not so much the weather or that being a small island, it was more down to language. We had quite a few French people come to the island who did not speak English, as in not at all.
LADISLAS MAURICE: [laughs]
SWEN: Culture, I would say, and this is going to be mean to my compatriots, but there were a lot of Germans who just could not fit into a culture and tried to make the culture fit around them, which just never works in any jurisdiction. About half of them are still there. Going forward, the issue is going to be easier because, following Brexit, only British and Irish people can move to Sark without a visa. We’ve got a target market of 73 million people who can move to Sark with no paperwork, they just need to find a place to live in. For anyone else, whether European Union citizens or someone from Japan or Australia, they require a visa, which is either a work visa, you need to find a job, which is inherently challenging on a small island that just basically lives of tourism, or they need to create a company and employ at least two locals and create significant economic benefits. That is absolutely feasible.
If someone really wanted, they could get in on the back of that visa. But frankly, the visa is not particularly competitive compared to other entrepreneurs’ visas in other jurisdictions. We haven’t had any takers for that yet. We’re also not actively promoting it. Yeah, bottom line is, in the future, I think it’s going to be primarily British and Irish citizens who will want to move to Sark, and there you have much less of a churn issue because they’re familiar with the culture, the language, etc., etc.
CHRISTOPHER: Yeah, if I can add to that. Swen’s absolutely right, it’s the culture that makes the difference between whether you stay or go. And actually, the culture of a small community is quite different to the culture of, say, living in a city. Those that have stayed have absolutely embraced the culture of the island. They participated, they volunteered for things that people who’ve been on the island for years will expect to volunteer for. They’ve absolutely embraced living in the community of the island.
SWEN: Several of them are in Parliament.
CHRISTOPHER: Now, yes, indeed, several are.
LADISLAS MAURICE: So newcomers already in parliament?
CHRISTOPHER: Yeah. They’ve been there for a couple of years.
SWEN: Two. You need to be there for two years.
CHRISTOPHER: Yeah, you need to be there for two years. But we have some of those who’ve been there–
LADISLAS MAURICE: Foreigners or English?
CHRISTOPHER: No, they’re English-speaking.
SWEN: Yeah, Brits.
LADISLAS MAURICE: Okay.
CHRISTOPHER: Yeah, they are all Brits. And that’s not to say they, you know, we have those who are not Brits. I certainly know of a German family, or Austrian, whichever, who have absolutely embraced the way of life on Sark, and are members of the first responding team that volunteers, or members of the fire service. And embracing the culture in that way means that you are absorbed into the concept of being a local.
Real estate on Sark
LADISLAS MAURICE: Interesting. I got so hyped up by my own video [laughs] when I did this that I looked at into two things. One, moving there myself, potentially, for parts of the year. I had a look at the housing stock for rentals. It was underwhelming. I also made an offer on a house to purchase. We didn’t end up reaching a deal with the seller. But there’s an issue with the real estate and the state of your housing stock on the island. And that is inherently an impediment to people moving there full-time.
CHRISTOPHER: It is. And I’ll let Swen deal with this.
SWEN: Yes. The quality of the real estate is pretty terrible, to put it bluntly. And we also just simply don’t have enough real estate on the island compared to the demand right now and also compared to one very important issue, which is what we’re having lots of conversations about right now with a variety of stakeholders. You probably cannot run an island like Sark that is self-governing on the back of a population of 600. We don’t have a baker, for example. There’s just no critical mass to have someone operate a bakery profitably. For many years, until literally weeks ago, we always had empty seats in parliament because we didn’t have enough people willing to stand for parliament.
Among urban developers, it’s usually a rule of thumb that you need 1,100 to 1,300 households to run a community in a sustainable fashion. A household in the UK is 2.4 people. We’re not saying that is the right figure for Sark. What we’re saying is that it’s certainly not 600, it’s also not 10 times that, but it is somewhat higher than 600. And for that, we need more housing to be available on the island, which could start and could make a very significant start refurbishing the derelict properties that are on the island. We have unfinished construction sites, we have houses that have literally burned down. We’ve worked out that with the existing real estate footprint on Sark, you could easily accommodate 1,200 people, which is already a doubling, without adding a single square foot of concrete to the island surface.
And then there’s the question whether there shouldn’t be a limited amount of additional development. Always keep in mind, we want to protect Sark the way it is. You don’t want skyscrapers, you don’t want overdevelopment. But right now, the island is not sustainable and not resilient, and that is an issue that will require, one way or another, more people.
CHRISTOPHER: It is all about people. It’s having the number of people that makes you a resilient, sustainable society.
SWEN: And sustainable not in the fashionable term, but just overall something that can literally sustain itself for generations to come and be strong rather than constantly go from crisis to crisis.
LADISLAS MAURICE: So you have some projects in place?
SWEN: Yes. What we’ve proposed publicly, this is common knowledge on the island, is to purchase existing real estate worth about £100 million and create a development plan. And we are currently in discussions with stakeholders, government people, other strategic partners who can bring in expertise. We have investors signed up for this. And we are aiming to create a Sark that would be, yeah, how would you describe it, Christopher? What are we aiming for?
CHRISTOPHER: We’re aiming for somewhere that you would absolutely desire to live in. It isn’t somewhere where you come to visit and go, this is fantastic, just visiting. You want to have somewhere that’s a place where you really want to live. I want people who are going to take part in living on the island and being part of the community.
LADISLAS MAURICE: Beautiful. And your family has been in charge of the island for how many generations now?
CHRISTOPHER: [I’m the seventh 12:05]. We’re 170 odd years’ worth of being there with more people in the pipeline waiting to take over.
LADISLAS MAURICE: Cool. So this is someone that is really committed. [laughs]
CHRISTOPHER: Yeah, absolutely. Absolutely.
LADISLAS MAURICE: Cool. Fantastic, gentlemen. Thank you very much for this update. I’m just encouraging people to just keep in mind that Sark will probably be in the news and that there are going to be interesting opportunities for people who want to move there, potentially invest there. We’ll see. I don’t know the details. You’re working on them. But we’ll see as times go.
SWEN: And we’ll need to have you visit Sark and then we do another video from there with the news.
LADISLAS MAURICE: Definitely. I’d love to go to Sark. Thank you.
SWEN: Thank you, Ladislas.
CHRISTOPHER: Thank you very much.