Mortgage tax relief 'must go'
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.THE HEAD of Britain's second-largest building society has called for the abolition of tax relief on mortgage interest payments, writes David Utting.
Tim Melville-Ross, chief executive of the Nationwide, said it would be in the longer-term interests of housing if mortgage interest tax relief - which will cost the Treasury pounds 5.8bn this year - were phased out over several years.
However, he argued that first-time buyers should be allowed a temporary increase in the pounds 30,000 ceiling on relief to stimulate recovery in the property market.
In an interview for the Channel 4's Answering Back, to be broadcast tonight, Mr Melville-Ross said it was unsatisfactory that tax relief could be claimed regardless of income. Its removal would cut government borrowing, allowing interest rates to fall.
Accusing the Government of lacking a coherent housing policy, he supported calls for a means-tested benefit for home-buyers with low incomes. He said this would solve the problems of owner-occupiers in arrears.
His views contrast with those of other bank and building society leaders, including Lord Alexander, chairman of National Westminster Bank, and Donald Kirkham, the Woolwich's chief executive, who have argued that the ceiling on relief should be doubled.
However, Richard Best, director of the Joseph Rowntree Foundation, which sponsors independent research into the housing market, said a reduction in the rate of tax relief from 25 per cent to 20 per cent would save the Exchequer pounds 1.2bn a year.
'That alone would cover the cost of a mortgage benefit scheme, enable the Government to give more help to first-time buyers and leave something in hand to stimulate growth in the rented sector,' he said.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments