Struggling homeowners have been given a helping hand by the States through the 2026 Budget – while impoverished car owners have not.
During the first day of debate as deputies thrash out the details of next year’s budget they agreed to maintain the level of mortgage interest relief currently being given – while rejecting a call to reduce fuel duty.
Deputy Aidan Matthews, supported by Deputy David Goy, led calls for the amount of mortgage interest tax relief on a person’s principal private residence to be held at its present level of £3,500, and to scrap the phased withdrawal of the tax relief.
He said the situation had changed since the States agreed to phase out the relief, with interest rates rising in recent years and many families stuck paying higher mortgage rates than they had expected to.
He said supporting home owners and in particular young families paying off the largest mortgages is important.
“(It would) encourage people to stay and put down roots. And these are exactly the sort of people that you want to encourage in your island to grow a successful economy, and one that has a bit of permanence, and not just a transitory workforce that comes in and goes back out again.”
Deputy Chris Blin was one of the 23 who supported the amendment.
“When it was originally adopted, interest rates were lower, mortgage costs more manageable. That’s no longer the case,” he said. “Today, many households are now facing significantly higher mortgage repayments, hundreds of pounds each month has a significant impact on their spend and at time, as we know, the cost of living is already putting serious pressures on the working families. But this relief, it’s not generous. It applies only to the principal private residence, and at most, several hundred pounds or often less. But for many, it does represent that small buffer, a little more certainty in an otherwise difficult or getting more difficult environment.”
When it came to decreasing the amount of fuel duty paid by motorists, a majority of deputies voted against the amendment.
Deputy Jayne Ozanne, supported by Deputy Liam McKenna, had argued that less well off families would be helped if the amount of fuel duty charged was decreased and their petrol bills were reduced accordingly.
She also said this would make things more fair for people who can’t afford electric vehicles which currently don’t pay any form of tax beyond the first registration duty.
“For many years, we’ve talked about introducing a tax on electric vehicles, but we have yet to see any propositions to make it actually happen. Electric vehicles have been on our roads for over 10 years now in ever increasing numbers, and there will come a point, inevitably, when we will have to change our tax structure and charge them to ensure that our roads are maintained. Surely it is well past time that we righted the wrong of allowing those who can afford some of the most expensive cars on our roads to get away with not paying anything towards their upkeep.”
During the debate, Deputy Lindsay de Sausmarez did emphasise that fuel duty does not pay for road maintenance so the comparison with electric vehicle owners paying no tax was not fair.
The Policy and Resources President said she couldn’t support the amendment because it wouldn’t actually help less well off people anyway.
“It remains the case that people in the lowest income quartile pay very significantly less for fuel in an average year than people in the highest quartile, and the people who would benefit most from this amendment are disproportionately wealthier people.”
Deputy Adrian Gabriel, the Environment and Infrastructure President also rejected the amendment saying his committee is working on wider plans to rebalance the burden around transport taxation.
“This amendment though well meaning risks compromising our environmental goals, weakening our fiscal position, and delivering poorly targeted support. I certainly won’t be supporting it and I urge members to reject it and instead work together with the committee towards more sustainable solutions.”
Voting records
23 deputies voted in favour of maintaining mortgage interest tax relief, with 15 voting against.
The voting record can be seen HERE.
Six voted in favour of reducing fuel duty with 30 voting against.
The voting record can be seen HERE.
The budget debate continues…