A TAX break which allows Islanders to claim relief on loan interest payments for their mortgage could be reinstated from 2027, if Members agree.
Mortgage interest tax relief can be claimed for the purchase or extension of a main property but was cut as part of the 2016 Budget and is set to be phased out completely by next year.
The amount of interest relief available has been reduced by £1,500 each year since 2017.
However, Deputy David Warr is now calling for the policy to be reintroduced from January 2027.
In a Budget amendment, the St Helier South Deputy said that it is an “anomaly” that people with mortgages on second homes can still receive tax relief but that similar benefits are being removed on primary properties.
Many households coming towards the end of fixed-rate terms are facing the prospect of a massive rise in their monthly repayments with Bank of England base rates having increased significantly in recent years.
Deputy Warr said: “I am from a generation who have benefitted from mortgage interest relief in an era when housing costs were significantly lower than they are today.
“It is therefore odd that in an era of higher interest rates and significantly higher housing costs that we are abandoning this tax relief.”
He added that reinstating the relief “has to be a good thing” when work is being down to encourage home ownership.
“Homeowners are saving and building an asset that one day may be able to be used to enhance their income when they retire in an era when we are on average living longer,” he added.
A petition calling for the tax break to continue beyond 2026 has amassed more than 1,700 signatures and is awaiting a ministerial response.
Treasury Minister Elaine Millar has previously told the JEP that, while the future of mortgage interest tax relief had been discussed around the Council of Ministers’ table, it was unlikely to be reinstated.
Deputy Warr continued: There are many options available. For example, the tax relief on second home mortgages could be significantly reduced if not removed altogether and this additional income could be used to finance the gap created by mortgage relief on a first home.
“The level of relief could also be reviewed when appropriate or required by external
factors.
“There are a number of policy options available, and I would like the government to
consider those options throughout 2026 and implement such a policy by January 2027,
with any necessary reports brought to the Assembly.”
The 2026 Budget, and all amendments, are due to be debated during the States sitting beginning Monday 8 December.