More than a decade ago, homeowners were over £10 billion better off than they are today, a new report by the Council of Mortgage Lenders reveals.
Changing fiscal policy means that homeowners today are financially worse off than they were in 1994, the council says.
The Council of Mortgage Lenders blames the abolishment of tax relief on mortgage interest and increases in stamp duty and inheritance tax for this reduction in income support by the government.
It is estimated that the inheritance tax paid on residential property has more than doubled over the last decade, bringing it to a total of £2.9 billion last year.
"The failure to index thresholds for both inheritance tax and stamp duty means that the tax burden on homeowners has grown significantly in recent years," comments Bob Pannell, the head of research at the Council of Mortgage Lenders.
He says this "sits oddly" with the government's "stated goal" of extending homeownership to 75 per cent of the population.
"One of the iniquities of inheritance tax is that the government is taxing growing numbers of home-owners at 40 per cent when they die, even when they have never been higher-rate taxpayers during their lifetime," Mr Pannell continues.
The report, which is published in the Council of Mortgage Lender's relaunched newsletter, predicts that the next few years will see a "further dramatic rise" in the number of estates which will be liable for inheritance tax.
Mortgage holders £10bn worse off, says mortgage lenders' council
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Mortgage holders £10bn worse off, says mortgage lenders' council
Wed, 25 Jan 2006
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