To ask the Chancellor of the Exchequer what is his estimate of the cost to the Government of mortgage interest relief in (a) 1987–88, (b) 1988–89 and (c) 1989–90, estimated; and what proportion of this accrues to higher-rate taxpayers.
The information requested is given in the table. Estimates are based on projections of the 1987–88 survey of personal incomes. The figures for 1988–89 and 1989–90 are therefore provisional.
Year
| Cost of mortgage interest relief £ million
| Percentage of relief at excess over basic rate Per cent. |
| 1987–88 | 4,900 | 9 |
| 1988–89 | 5,400 | 6 |
| 1989–90 | 7,000 | 6 |
To ask the Chancellor of the Exchequer what is his estimate of the income which would accrue to the Government from restricting mortgage interest relief to the basic rate of income tax.
The additional yield to the Exchequer from restricting mortgage interest relief to the basic rate of income tax is estimated to be £430 million at 1989–90 levels of income.
To ask the Chancellor of the Exchequer what would be the cost to the Government of increasing the maximum limit for mortgage interest relief to (a) £35,000, (b) £40,000 and (c) £45,000.
Provisional estimates of the direct revenue costs of increasing the ceiling for mortgage interest relief are (a) £320 million, (b) £580 million and (c) £770 million. These estimates are at 1989–90 levels of income and current interest rate levels and exclude behavioural effects, which would be substantial for the higher ceilings.