Guernsey Approves Plan for Keeping Mortgage Interest Relief in Budget

Lawmakers have officially approved a legislative move to maintain tax relief on interest paid toward housing loans, effectively stopping a scheduled plan to phase out the benefit. The decision means that individuals who want to prioritize keeping mortgage rate expenses manageable can continue to claim financial assistance during a challenging economic climate. Originally agreed upon back in 2015, the gradual removal of the support scheme has now been brought to a halt following a successful budget amendment.

Deputy Aidan Matthews introduced the proposal, arguing that phasing out the financial aid right now represents the absolute worst timing for local residents. Under the rules, property owners can apply for tax relief on the interest paid for their primary residence up to a maximum amount of £3,500 every single year.

Opposition to the measure was voiced during the discussions. Deputy Neil Inder spoke against the plan, pointing out that while the concept has merits on its own, approving all proposed amendments simultaneously would pile an additional twenty million pounds onto the budget.

Meanwhile, Alderney representative Alex Snowdon emphasized the importance of the timing, noting that numerous individuals across the islands are working multiple jobs just to cover housing costs and support their families. He suggested the vote delivers a strong message of assistance to citizens enduring difficult financial conditions, noting that ordinary people are currently borrowing significantly larger sums due to escalating property values.

Concerns Over Fairness and Housing Pressures

Not all officials supported the measure without reservation. Deputy Jayne Ozanne admitted she felt heavily divided, describing the perk as an unfair advantage for property owners compared to tenants. She stated that the policy fails to address the wider crisis of residents leaving the island because they cannot save for a deposit while paying high monthly rents. Highlighting the disparity, she mentioned that average rental costs exceed two thousand pounds monthly, while average housing loans sit at one thousand pounds, though she ultimately acknowledged that families are experiencing severe financial pressure.

Tax relief on housing loan interest of up to £3,500 annually will remain available for residents.

Why it matters

This decision directly impacts local property owners by preserving a tax break worth up to £3,500 a year on their primary residence loans. While it offers immediate financial relief to families struggling with high housing costs and tougher interest rates, it also sparks debates about fairness regarding renters who face steep monthly payments without similar tax advantages.