`Labour will be taxing your home next year'
Saturday 03 April 1999
The abolition of mortgage interest tax relief (Miras), rises in stamp duty and falling income support payments mean that the net subsidy of pounds 2.5bn paid by the government to UK homeowners in 1997-98 will become a net tax of pounds 140m from April 2000.
This corresponds to a net tax per household of pounds 8.50, according to analysis conducted by ROOF magazine's Housing Market Healthcheck, and follows years of gradual erosion of the home ownership subsidy.
In 1992-93, UK homeowners received net payments from the government of pounds 6.1bn, with MIRAS payments - which totalled pounds 5.2bn - accounting for the bulk of the pay-out. ROOF magazine's analysis demonstrates that just five years later, Miras payments had almost halved to pounds 2.7bn, and net payments to homeowners had fallen by almost a third.
By April 2000, the changes introduced in the last Budget - which scrapped Miras and increased stamp duty for homes worth more than pounds 250,000 - will mean that householders are paying the Government for the privilege of owning a home.
Tim Dwelly, editor of ROOF Housing Market Healthcheck, warned that the trend towards rising taxes for UK homeowners was set to continue. The abolition of Miras and the transfer of interest rate control from the Treasury to the Bank of England mean that the Chancellor will be unable to rely on traditional instruments of control in times of housing boom.
As a result, according to Mr Dwelly, the Treasury may be forced to resort to further increases in stamp duty and new methods of taxation, such as the imposition of VAT on new greenfield homes and ending the exemption from capital gains tax.
Mr Dwelly said: "Cheap European-style mortgage rates come with a price. More affordable borrowing could lead to boom conditions. With no control over interest rates and no Miras left to cut, the Treasury may have to use tax to control overheating. If this happens, it is essential that low income owners are protected".
Higher taxes on the housing market are relatively common within the euro- zone, ROOF magazine said.
- 1 Keira Knightley topless: Usually conservative actress does own take on #Freethenipple campaign for Interview Magazine
- 2 Oil tanker with $100 million cargo goes missing off Texas coast
- 3 George Galloway left with severe bruising after attack in Notting Hill by man 'shouting about the Holocaust'
- 4 Saudi Arabia executes 19 in one half of August in 'disturbing surge of beheadings'
- 5 Brother and sister, Christopher Buckner and Timothy Savoy, arrested for 'committing incest after watching 'The Notebook''
YouTube video posted by Isis militants shows 'execution of 250 Syrian soldiers'
Keira Knightley topless: Usually conservative actress does own take on #Freethenipple campaign for Interview Magazine
Oil tanker with $100 million cargo goes missing off Texas coast
George Galloway left with severe bruising after attack in Notting Hill by man 'shouting about the Holocaust'
Lady al-Qa’ida: On the trail of Dr Aafia Siddiqui, the world’s most wanted prisoner
Robin Williams Emmys tribute led by Billy Crystal criticised for including 'racist' joke about Muslim woman
The Rotherham child abuse scandal is a tale of apologists, misogyny and double standards
What do immigrants really think of Britain? Polish immigrant's Reddit post goes viral
Scottish independence TV debate: Pumped-up Alex Salmond bounces back in bruising second round against Alistair Darling
Do you realise just how foolish the UK looks?
With Douglas Carswell joining Ukip, my party has taken another giant step forward
- < Previous
- Next >
iJobs Money & Business
£35000 per annum: Harrington Starr: Network Engineer (CCNP, CCNA, Linux, OSPF,...
£50000 per annum: Harrington Starr: DevOps Engineer (Systems Administration, L...
£60000 - £70000 per annum: Harrington Starr: A prestigious leading professiona...
£50000 per annum: Harrington Starr: Financial Technical Consultant (C++, C#, F...