Only people with home loans over £275,000 will be affected by the cap on mortgage relief.The committee hope the figure is high enough to avoid a repeat of the outcry which forced their predecessors to back down when they attempted the move.However, estate agents have already acted with dismay, warning that the cap is ‘dangerously low’ and will de-stabilise the housing market.Alan Maclean, president of the Estate Agents Association, told the JEP: ‘We believe the average mortgage is above that figure and many people in the middle market have taken out mortgages under the prevailing tax system and are now being abandoned by it.
‘They should be protected, not abandoned.’The proposals, if approved by the States, will come into force from next January.Finance president Senator Terry Le Sueur says the package proves his committee’s commitment to taxing the better-off.’We know that some tax measures being considered, such as VAT or sales tax, are regressive and hit the less well off proportionately more.
If some regressive tax measures are necessary, it is essential that they are matched by other measures so that the overall effect is progressive,’ he said.But that has been seized upon by Deputy Alan Breckon, who first sought to cap mortgage tax relief in 1994.’They’re only doing this to justify hitting pensioners and the poor.
This is the trade-off and it’s ten years too late,’ said the Deputy.Finance finalised their proposals yesterday and revealed at last night’s Jersey Rights Association public meeting on user-pays policies that they had reached a decision, although Senator Le Sueur did not reveal what it was until speaking to the media afterwards.The meeting had promised to be fiery but deferment of the proposed sewerage tax last week seemed to have defused public rage over user-pays policies.But it the meeting did demonstrate the widening split between politicians on the issue of tax-raising – four States Members spoke broadly in favour of user pays and four against.Health president Senator Stuart Syvret won warm applause for his attack on the policies of the past, claiming that billions of pounds had been lost because the Island had allowed the rich to escape paying their fair share of taxes.He said he accepted that the finance industry was the ‘only game in town’ but added: ‘It’s our bread and butter but it has got to be made to pay its way.’ JRA chairman Rui de Abreu described it as a positive meeting but said: ‘We have not heard any solutions to the problems but the JRA will continue to keep following the issue.’
