Less than 24 hours after deputies had backed Aidan Matthews’ bid to instruct Policy & Resources to leave mortgage interest tax relief untouched in 2026, the senior committee presented a Budget amendment of its own for a major rethink of financial support of home ownership.
With the exception of one deputy who abstained, it won unanimous support from the Assembly to work with the Housing Committee and return to the States in the next 12 months with recommended reforms.
Proposing the amendment, P&R treasury lead Gavin St Pier said the committee remained sceptical of the efficiency of mortgage interest tax relief, which provides homeowners with tax breaks currently estimated to be worth £3.5m. a year.
‘As a financial incentive, mortgage interest tax relief is not specifically targeted at assisting first-time buyers to access private home ownership or to homeowners who are in need of financial support,’ he said.
‘In addition, because the relief is incorporated into the calculations used by lenders to assess how much a household can borrow, over time it has resulted in upward pressure on house prices, impacting the ability of first-time buyers to afford a property.’
Mortgage interest relief is gradually withdrawn from taxpayers once their salary reaches £85,000, but they would need an income of nearly £180,000 to lose it completely.
P&R will now look into alternative forms of tax relief or other means of financial support for homeowners or prospective homeowners who need it most.
‘Guernsey’s housing crisis has made it impossible for many to buy a property,’ said Deputy St Pier. ‘For our island to thrive, our young people need the stability, confidence and community ties that home ownership brings.’
Deputy John Gollop abstained on P&R’s amendment. He was concerned that it could undo the long-term purpose of Deputy Matthews’ amendment of the previous day, which he felt had started to turn around a decade or more of errors in housing policy.
Deputy Jayne Ozanne said that her rent in Guernsey was five times the mortgage costs on a property she owns in the UK, which she said was ‘totally unsustainable’. She praised P&R for responding constructively to the previous day’s debate and trying to find solutions to housing problems.
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