Mortgage Interest Relief

HC Deb 31 October 1986 vol 103 cc265-6W

Sir Brandon Rhys Williams

asked the Chancellor of the Exchequer if he will publish a table showing the estimated costs at current and at constant prices of mortgage interest tax relief in 1960, 1970, 1980, 1985 and 1990, showing the cost as a proportion of income tax revenue, and the effect of the concession on the amount of the income tax base in each year.

Mr. Norman Lamont

The estimated costs of mortgage interest tax relief are as follows:

	Mortgage interest relief
	Current prices	1985–86 prices1	as a percentage of income tax and surtax receipts
	£ million	£ million	per cent.
1960–61	70	540	2.7
1970–71	285	1,440	4.8
1980–81	1,960	2,720	8.1
1985–86	4,750	4,750	13.4
1 Expressed in 1985–86 prices using the retail prices index.

Details of the amount of mortgage interest on which the tax relief in 1960–61 and 1970–71 was based are not readily available. Mortgage interest eligible for tax relief is estimated to have been £6 billion in 1980–81 and about £15 billion in 1985–86. The cost of relief in 1985–86 includes the cost of relief in respect of mortgages previously under the option mortgage scheme. The cost of mortgage interest relief in 1990–91 will depend on factors such as the level of borrowing, mortgage interest rates and the tax regime in that year.