Guernsey keeps mortgage interest tax relief and halts its planned phase-out

Homeowners in Guernsey will keep their tax relief on mortgage interest after politicians approved an amendment to the island's Budget, BBC News reports. The decision also stops the gradual withdrawal of the relief, which had been agreed in 2015.

What the relief covers

The scheme lets homeowners claim tax relief on interest paid on the mortgage for their main home, up to a limit of £3,500 a year. Under the earlier plan, the relief was being reduced in stages. With the amendment approved, that process has been confirmed as halted.

Deputy Aidan Matthews, who brought the proposal, argued that this was the "worst possible time" to remove support for borrowers. Alex Snowdon, who represents Alderney, backed the change. He said many households were taking on several jobs to meet mortgage costs, and that rising house prices had pushed people into larger loans just as interest rates returned to higher levels after a long period of cheap borrowing.

Concerns over cost and fairness

Not everyone in the debate supported the move. Deputy Neil Inder said the idea had merit on its own, but warned that approving all the proposed amendments together would add about £20m to the budget.

Deputy Jayne Ozanne said she was divided on the issue because the relief gives homeowners an advantage that renters do not receive. She noted that average rent on the island is above £2,000 a month, compared with an average mortgage payment of around £1,000, and said high rents make it hard for tenants to save for a deposit. In her view, the relief would not address people leaving the island, though it might encourage existing mortgage holders to stay. She nonetheless acknowledged that families are under financial pressure.

What it means for businesses

For firms working in property, lending, financial advice and household services, decisions like this shape how much disposable income borrowers have and how attractive home ownership remains. Keeping the relief offers some stability for mortgage holders, while the debate over renters and the overall budget cost suggests housing affordability will stay a central issue for local policy and the businesses that depend on it.