The Guernsey legislature has voted to retain tax relief on mortgage interest payments, reversing a previously agreed plan to phase out the benefit. Deputy Aidan Matthews, who introduced the amendment to the budget, characterized the current period as an inappropriate moment to eliminate the relief given economic conditions facing residents.
Under the existing scheme, homeowners can claim tax relief on interest payments up to £3,500 annually for mortgages on their primary residence. The original phased withdrawal, which had been established in 2015, will now be discontinued as a result of the approval.
Supporters of the measure, including Alderney representative Alex Snowdon, argued that retention of the relief would provide meaningful assistance to residents facing financial strain. Snowdon noted that many individuals are working multiple jobs to manage mortgage obligations alongside family expenses, and characterized the initiative as a signal of governmental support during a difficult period. He also referenced the transition from historically low interest rates to more elevated borrowing costs, which has put additional pressure on households.
Opposition to the measure centered on fiscal and equity concerns. Deputy Neil Inder raised concerns that approving the amendment alongside other budgetary changes would add substantial costs to the overall budget. Deputy Jayne Ozanne expressed ambivalence about the relief, arguing it creates an unfair advantage for homeowners compared to renters, many of whom face barriers to saving for down payments due to elevated rental costs. She cited a significant disparity between average island rents exceeding £2,000 monthly and average mortgage payments around £1,000, highlighting broader affordability challenges that the relief does not address.
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