§ Mr. LidingtonTo ask the Chancellor of the Exchequer what estimate he has made of the annual cost to public funds of mortgage interest tax relief at(a) 20 per cent. and (b) 23 per cent. [17857]
§ Mr. JackThe estimated total cost of mortgage interest tax relief in 1997–98 is £2.4 billion. The rate of relief is 15 per cent. If the rate of relief were 20 per cent. the extra cost to the Exchequer would be about £800 million. If the rate of relief was 23 per cent. the extra cost would be about £1.3 billion.
These estimates are based on the assumption, by convention, of no change from the current estimated average building society interest rate of 6.51 per cent.
§ Mr. LidingtonTo ask the Chancellor of the Exchequer if he will estimate the annual cost to public funds of increasing the amount of a mortgage allowable for tax from £30,000 to £60,000, assuming no other changes to the tax system. [17858]
§ Mr. JackThe estimated total cost of mortgage interest tax relief in 1997–98 is £2.4 billion. Relief is limited to the interest on loans of £30,000. if the limit was increased to £60,000, and the rate of relief remained at 15 per cent. the extra cost to the Exchequer would be about £900 million.
The estimate is based on the assumption, by convention, of no change from the current estimated average building society interest rate of 6.51 per cent.