Mortgage interest relief to remain at £3,500

Deputy Aidan Matthews argued mortgage interest relief rates should stay at £3,500

A move to halt the proposed reduction in mortgage interest relief has been approved.

Deputies Aidan Matthews and David Goy asked States members to support a freeze to the current rate of mortgage interest relief at £3,500.

Policy and Resources (P&R) had proposed reducing it to £2,500 next year, a move which was criticised by landlords.

States members voted 23 to 15 to reject the proposal. A final vote on whether to reduce mortgage interest relief will likely take place later this week.

Guernsey's States agreed to start reducing the level of mortgage interest relief in a phased manner in 2015 as part of the pensions tax and benefits review.

Despite this, the phased withdrawal was paused in 2023 and 2024 because of high interest rates.

Vice-president of P&R Gavin St Pier, who has led the budget debate, said the proposal would cost the States £3.5m.

Deputy Jayne Ozanne highlighted the high costs of rents locally

Vice-president of the Committee for Housing Sasha Kazantseva-Miller said she would be supporting the proposal.

She added she thought it was strange that there was very little support for homeowners in the budget: "At the time when we should be helping people out with housing, we are doing nothing."

Deputy Jayne Ozanne said she understood why there was a need to support people who had purchased a home: "Having a mortgage is a pipe dream to so many of our islanders."

While Deputy Matthews, who brought the proposal, said supporting the move would be "sending out a message that the state supports homeownership."

He added in his summing up that he felt the budget was "anti-homeowners".

President of Policy and Resources Deputy Lindsay de Sausmarez criticised the move to freeze the rate of mortgage interest relief.

She said it was unfair that people who were renting would subsidise homeowners through their taxes.