The Withdrawal of Mortgage Tax Relief: a survey and evaluation of the debate

In: Policy & politics, Band 10, Heft 1, S. 47-63

Abstract

Criticisms of mortgage tax relief have come from several quarters in recent years but they have been rejected by successive governments. We present here estimates of the distribution of this subsidy to owner-occupation and show, contrary to the claims of the Housing Consultative Document (1977), that it has some tendency to be regressive. The justification for continuing this policy, including that advanced in the Green Paper, is then critically examined in light of an economic analysis of effects. It is concluded that the gradual withdrawal of the subsidy would increase equity and efficiency in housing policy.