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Would bringing back MIRAS be a good idea?

Encouraging marriage has always been a cornerstone of Conservative Party policy and recent press reports have speculated that Tory leader Michael Howard might be considering a return to MIRAS for married couples – a move that would save them some £3,000 per year.

MIRAS – mortgage interest relief at source – was introduced in 1983 to provide homebuyers with tax relief on the interest payments on their mortgages. MIRAS was progressively scaled back in the late 1980s and 1990s – multiple tax relief was abolished in August 1988; higher rate relief was scrapped in 1991; and relief was cut to below the basic rate in 1994 and again in 1995 and 1998. MIRAS was finally abolished in April 2000.

So, Mortgage Strategy asks: Is a return to MIRAS feasible?

John Stewart, PMI Independent Financial Advisers

It would cost too much to bring MIRAS back. It would mean lower payments but interest rates are low anyway. It might make the market more buoyant but that is not needed.

Harry Katz, Norwest Consultants

It would be better to see a revision of Stamp Duty and make sure regions other than the South-East are made attractive to buyers to work in. Bringing back MIRAS should not be a priority.

Mark Osland, Fidelius

It is feasible but the simplest thing to do is just reduce taxes. MIRAS would have little impact, especially with the current low interest rates.

Ruth Whitehead, Ruth Whitehead Associates

It&#39s just a political manoeuvre and one that hasn&#39t been thought through. It would be less of a task to reduce Stamp Duty, which is already in place, than to set up MIRAS from scratch.

Trevor Youens, Flower IFA

It would probably return at some ridiculous amount like up to £60,000 which wouldn&#39t have much effect in the South-East. People earning £20,000 or less would be the targets which means the middle class would have to pay.

evin Morgan, EZI UK

Think of something new, Mr Howard. It&#39s an old idea which is being re-heated to win votes. We have a competitive market which doesn&#39t need a shot in the arm.

Rod Murdison, Murdison & Browning

A better idea would be to make MIRAS available only to first-time buyers up to a maximum of £100,000. It should also only be applicable at basic rate of tax relief so those who are already wealthy would be excluded.

Carl Melvin, Millbrae Financial Services

It would have to be severely revised. The problem with the original scheme was that the level of MIRAS didn&#39t increase in line with house price rises. Howard probably just wants to get himself a reputation as a tax-cutter.

Jim Gillespie, Independent Financial Services

To make a difference it would have to fall into line with the average price these buyers pay for a property. If MIRAS came back at the original maximum of £30,000 it would be futile.

Tim Stone, Andrews Mortgage Services

It would be a welcome development but should be made available to all house purchasers. It is a moot point as to whether it would be worthwhile in terms of value.


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