2000: The Death of MIRAS
Did you know the government used to help pay your mortgage? MIRAS (Mortgage Interest Relief At Source) gave homeowners tax relief on their mortgage interest until it was abolished by Gordon Brown in 2000.
It sounds unbelievable to modern homebuyers, but for much of the late 20th century, the UK government actively subsidised residential mortgages. Introduced in 1983 (replacing a more complex tax relief system), Mortgage Interest Relief At Source (MIRAS) allowed borrowers to deduct tax relief directly from their mortgage interest payments.
The Subsidised Housing Boom
At its peak in the 1980s, couples could combine their MIRAS allowances, leading to a surge of unmarried couples buying properties together to maximise the tax break. When the government announced they would end this double allowance in August 1988, it triggered a massive frenzy of buying before the deadline, directly contributing to the late-80s housing bubble and subsequent crash.
Throughout the 1990s, successive Chancellors gradually reduced the value of MIRAS, recognising that it artificially inflated house prices and cost the Treasury billions. Finally, in his 1999 budget, Chancellor Gordon Brown announced the complete abolition of MIRAS, effective April 2000. Decades later, the echoes of this debate returned when George Osborne abolished mortgage interest relief for private landlords (Section 24)—proving that property tax incentives are always temporary.