As widely predicted the Chancellor of the Exchequer Gordon Brown has scrapped Mortgage Interest Relief at Source (MIRAS).
The announcement in today's budget sees MIRAS disappear from April 6, 2000. Until then relief will continue to be given at 10 per cent on the first £30,000 of a loan.
It is predicted the loss of MIRAS will cost the average homebuyer an extra £200 a year.
The Inland Revenue will make special provision for elderly people with home income plans. It will also be entering into discussions with mortgage lenders, home income providers and other interested parties to ensure a smooth transition to the new tax regime.