RETAINING mortgage interest tax relief would make “a very small amount of difference”, the Treasury Minister has said – amid growing calls for the tax break to continue beyond next year.
Deputy Elaine Millar made the comments during a hearing with the Common Strategic Policy Review Panel.
Panel member Deputy Louise Doublet asked whether the phasing out of mortgage interest tax relief – through which eligible Islanders could claim support on loan interest payments for the purchase or extension of their main property – had been “reconsidered”.
The amount of interest relief available has been reduced by £1,500 each year since 2017 and will be phased out completely by next year.
Deputy Millar acknowledged that a petition calling for the tax break to continue beyond 2026 has garnered more than 1,000 signatures, surpassing the threshold at which ministers are required to respond.
“We will be doing a response,” she told the panel.
“When we discussed it on a preliminary basis, the answer to that was that’ no, I don’t think we will’.
“It’s in the last year. I think retaining it will make a very, very small amount of difference. I can’t remember the numbers, but it makes a very small difference to the households that do have it.”
Deputy Millar also noted that there were “lots of people” who didn’t qualify for the relief, pointing to the scheme’s marginal rate eligibility criteria.
“We also have to bear in mind that you are giving a benefit to people who have a capital asset that you would think will be appreciating in value, where people in rent accommodation are not getting that benefit,” she added.
“It has been phased out over a ten-year period and I think certainly our preliminary assessment was that there would be very little value to stopping that programme, and that to the extent people need support, it would be better to target it more appropriately.”
