A PETITION calling for mortgage interest tax relief to be reintroduced has gathered 1,000 signatures – at which point ministers will be required to respond.
The tax break was cut as part of the 2016 Budget and is set to be phased out completely by next year.
The scheme enables Islanders to claim tax relief on loan interest payments for the purchase or extension of their main property. 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.
A petition calling for mortgage interest tax relief to continue beyond 2026 was launched earlier this year by Islander Claudia Alves, who argued that the “allowance is needed now more than ever to give much needed financial relief for home owners paying high mortgages”.
In 2015, when the phased removal of mortgage interest tax relief was agreed by the States Assembly, the Bank of England base rate was 0.25%. Now, that figure stands at 4.5%.
The petition has now surpassed 940 signatures, with ministers required to respond once it reaches over 1,000 signatures.
But Treasury Minister Elaine Millar recently said there are no plans to reintroduce mortgage interest tax relief.
She told the JEP: “The idea behind it was to ensure that there was no unfairness between those in home ownership and those paying rent. It is a form of support that is available for home owners that is not available for other people.
“Given the stage we are at with it now I don’t think it would be appropriate to revisit that. I would not be beneficial to delay that any further and keep it in place. From our perspective, it is still better to target help where it is most needed and that is what we are looking at.”
The Treasury Minister added that she was not convinced the reinstating the allowance would help home owners greatly given the fixed level maximum thresholds that could be claimed.
A consultation on whether mortgage interest deductions should also be removed for landlords is currently taking place following a 2023 amendment to the Government Plan from Sam Mézec.
Members agreed to a Council of Ministers amendment to require the government to review removing the allowance for landlords before taking a decision on whether to abolish it.