Comments on: Deputy will challenge mortgage relief plans

By: Phil

Phil — Wed, 21 Nov 2012 10:17:22 +0000

They look pretty accurate to me, care to explain why they aren’t?

By: Sam

Sam — Wed, 21 Nov 2012 08:38:33 +0000

Reality Check,
Your figures are way up the creek, you obviously failed Maths and your figures only serve to totally muddy the waters.

Report abuse

By: a voter

a voter — Tue, 20 Nov 2012 23:25:31 +0000

A very well made point which I have not seen made elsewhere and had not occurred to me.

You could be absolutely right – perversely more people with the lower mortgages may have more disposable income for the reasons you give.

This just underlines how complex and counter-intuitive some of the underlying details are and why this whole area needs a good solid piece of work doing on it before T&R / all Deputies can be in a position to be able to reach a conclusion (and certainly before annnouncing a (presumptive) decision!)

Report abuse

By: Neil

Neil — Tue, 20 Nov 2012 09:44:03 +0000

If you are a house owner with a couple of kids in Guernsey, say with a 400k mortgage the state gives you about £3000 a year. £1000 for the kids and £2000 for the mortgage relief. Nice eh? And it gets better, house prices are rising at around 4% per annum so when you come to sell your property the state allows you to take all of the profit out of the asset untaxed. I can’t think of a better place to live be honest with you.

Treaury might have got this the wrong way round though. They would have been better starting taking the relief away at those on lwoer mortgages and working up, rather than working down. It’s reasonably obviosu it’s going to hit those with larger mortgages quite substantially.

If you have a 50k, 100k and 150k mortgage, the chances are you are in a more comfortable position. Children older, eaten substantially into your mortgage principal and likely to be slightly older with a higher income and probably with more disposable.

If we are going to lose mortgage relief over a longer period of time, Treasury need to reasses which end of the stick they are looking at. Starting at 400k for those who may have just bought that house seems a bit harsh to me.

50k, 100k, 150k….that way.

Report abuse

By: West

West — Tue, 20 Nov 2012 07:44:39 +0000

Is it the States unwilling or the civil service?

Report abuse

By: Puzzled...

Puzzled... — Tue, 20 Nov 2012 06:16:03 +0000

If one ignores the various maths errors that have tended to confuse matters we still appear to have the Minister and his Board going in different directions. The Boss saying the tax relief will be wound down over seven years and his team saying “maybe”. It would be nice to have an official clarifying statement issued to the media by T. & R. and not just a few lines from the Boss directed to the denizens of this forum. Compared to the clatter of keyboards from thousands of worried property owners around the Island the silence from T.& R. at the moment is rather deafening and does nothing to ease the concerns of those property owners.

Report abuse

By: Otto

Otto — Mon, 19 Nov 2012 23:12:39 +0000

Sorry Toto, no one is buying that! Removal of Tax Relief is practically a new tax. We’ve gone from not paying tax on something to paying tax on something. The result is exactly the same as introducing a new tax and that is what people are angry about.

Myself and my family have absolutely no chance in Guernsey if this goes through will certainly have to look at life elsewhere.

Report abuse

By: they are the same

they are the same — Mon, 19 Nov 2012 18:25:50 +0000

A lot or a little, the point is if tax bill goes up, feels like a tax increase / new tax and that’s what it will look like when that money has gone from your bank account to the tax man / woman

Second, if in 8 years from now when the full removal is proposed to have occurred, and if you have £300k outstanding on your loan at that time, with interest at 5% /annum, you will pay £3000 per year more tax from this proposal every year for the remainder of your mortgage (on a slightly decreasing basis as your balance reduces).

Unlike in the past, not many of us think that the loans will be inflated away such that the £3000 in 8 years will feel like a couple of hundred pounds now.

For some people, maybe £3000 per year in 8 years can be shrugged off – but those people are likely the exception.

So this is for many, a very sizeable tax bill increase coming down the track and you cannot just will it away – it drops out of the maths!

Report abuse

By: Alex M

Alex M — Mon, 19 Nov 2012 17:04:05 +0000

The sad fact is that the States as a body STILL haven’t proved that they can make the cuts in their spending Gavin promised in his manifesto that he would wish to see. In fact, I have seen very little evidence that any States department is even trying to make the cuts that are appropriate and necessary. There’s a lot of talk about reducing waste, but when it comes down to it, the States have gotten so used to the good times that they simply appear unable and unwilling to trim the proverbial fat.

Report abuse

By: jamie

jamie — Mon, 19 Nov 2012 16:59:25 +0000

Did i say it was a COST ?

Report abuse

By: jamie

jamie — Mon, 19 Nov 2012 16:56:25 +0000

Your sums are wrong !!

…. which should come as a relief (no pun intended).

Interest per annum is £20,475 (350k x 5.85%). At it’s maximum (in 2021), your loss of tax relief would be 20% of this figure ( £4,095 )

Report abuse

By: Reality Check

Reality Check — Mon, 19 Nov 2012 16:34:32 +0000

Sorry, that is obviously wrong

It should say you will lose £81,900 in tax RELIEF, which equates to £16,380 in TAX.

Report abuse

By: Reality Check

Reality Check — Mon, 19 Nov 2012 16:29:06 +0000

This will badly affect people on high fixed rates.

If you have a £400,000 on 6 % for instance, this will cost you an EXTRA £21,600 in TAX over the phase in period (7 years), and each year after you will have to find an extra £5000 to pay in tax.

Report abuse

By: Mortgaged

Mortgaged — Mon, 19 Nov 2012 16:20:07 +0000

Hold on a minute, this will take 7 years to take its full effect, that sounds like a lot of time to downsize!

Report abuse

By: Reality Check

Reality Check — Mon, 19 Nov 2012 15:57:41 +0000

This scares me to death!

This will basically KILL people who are on fixed mortgages like me. (10 yr fixed)

I don’t know who else has done the sums, but if as me you have tried to be sensible and take out a fixed rate loan (just before they dropped as I did) This will bankrupt you.

It would cost you £82,000 over the 8 year period.

If you have a £350k mortgage at a fixed rate of £5.85%

2013 $0 extra to find/year
2014 $0 extra to find/year
2015 $2950 extra to find/year
2016 £5850 extra to find/year
2017 £8775 extra to find/year
2018 £11,700 extra to find /year
2019 £14,625 extra to find per year
2012 £17,550 extra to pay per year
2021 £20,475 extra to pay per year

Total of £81,900 extra to pay just over that short period, I don’t know about you, but that would force me to leave my Island of Birth and have to move to the UK.

Report abuse