This seems like a big deal - buying a home in the UK

So, in the US, a homeowner can deduct the amount paid to the interest of their home loan.

I hear that is not possible in the UK.

What?  That seems crazy to me!  That is such a huge part of the financial benefit for homeowners in the US.

So, if you can't deduct any of your loan payments, the only thing (financially speaking) one gets in buying a home in the UK is the equity?  Not saying that is small potatoes but it doesn't come close to the benefits enjoyed by US homeowners.

Is it true what I've heard?

TIA!

It's true...
We used to have MIRAS (mortgage interest relief at source), but that was done away with in 2000.
I dont think anyone's really missed it that much.

Thank you, otterpop.  Love the sig, btw.

Well, that is a shame.  I must say, it is hard to go from the position of deducting that (for our former US mortgage) to financing a home without it.

you'll get used to it... it's really not such a big deal. 
btw, if you are just a PAYE (pay as you earn) normal employee (ie, not self-employed) in the UK, there is nothing to 'write off'.  We dont 'file tax returns' like they do in the USA.  Nothing to pay out (apart from what is automatically deducted from your wages), and nothing to claim back.... it's one of the great benefits of living here... you never have to worry about that crap again!   

you'll get used to it... it's really not such a big deal. 
btw, if you are just a PAYE (pay as you earn) normal employee (ie, not self-employed) in the UK, there is nothing to 'write off'.  We dont 'file tax returns' like they do in the USA.  Nothing to pay out (apart from what is automatically deducted from your wages), and nothing to claim back.... it's one of the great benefits of living here... you never have to worry about that crap again!   

I hear that!  I was overjoyed when I found that out! 

Thanks, that does sound great.  We're (DH) self employed so no hope there either.  It was great to write off the mortgage stuff AND a huge percentage of our home due to having our office there.  Now, we have our office in the home but can't deduct very much at all for our UK taxes.

But can't quantify the great experiences from living abroad.   We have a lot of gains there!

My wife says one of the reasons mortgage relief was eliminated is that cohabitating unmarried couples would each claim full relief on their separate and un-cross-referenced tax records.

Jim

Muse,

Look into the cost of buying a house, the type of salaries you will get over here and the taxes you will pay. There is a ton of info on this site! 

London and the South East are very expensive....the north is a bit cheaper but the salaries vs housing are relative....do your research.....

Best wishes.

Julie

London and the South East are very expensive....the north is a bit cheaper but the salaries vs housing are relative....do your research.....

Yes, they are!  But we love living where we are (Buckinghamshire) so that's just how it goes.  Funny how the most expensive area of Britain, Gerrad's Cross, has so many Americans!

Thanks1

you'll get used to it... it's really not such a big deal. 
btw, if you are just a PAYE (pay as you earn) normal employee (ie, not self-employed) in the UK, there is nothing to 'write off'.  We dont 'file tax returns' like they do in the USA.  Nothing to pay out (apart from what is automatically deducted from your wages), and nothing to claim back.... it's one of the great benefits of living here... you never have to worry about that crap again!   

Sorry about the above, Muse... i had somehow got the impression from your first post on this topic that you weren't actually in the UK!
Sorry mate.

Muse,
I'm relatively local to you over by Hazlemere.

I would say that mortgage relief was probably removed because there is a much higher demand for housing in the UK than in the States.  Not only is there no mortgage interest relief but the houses tend to cost more than the equivalent in the US.

The gov't wants to setup all these starter homes but there seems to be a lot of problems getting the idea off the ground and finding actual space to build that isn't Greenbelt.

Matt

Don't forget about Stamp Duty when buying your house --- generally 1 - 4% depending on the cost of house.  http://www.inlandrevenue.gov.uk/rates/stamprates.htm

We also found a few obstacles because we have no credit history over here to qualify for a mortgage.

Although we have owned for the past 10 years in the US -- decided to rent over here --- doesn't seem to be much advantage to owning - especiallly since there has already been so much appreciation over the last 5 years.  Not sure if this is a housing bubble or not...

Muse,
I'm relatively local to you over by Hazlemere.

I would say that mortgage relief was probably removed because there is a much higher demand for housing in the UK than in the States.  Not only is there no mortgage interest relief but the houses tend to cost more than the equivalent in the US.

The gov't wants to setup all these starter homes but there seems to be a lot of problems getting the idea off the ground and finding actual space to build that isn't Greenbelt.

Matt

Is that true (higher demand for housing in the UK)?  Seems like there is a huge demand (hence the ridiculous house craze) in the States!  Combined with the 0% loans and refis, makes for a seller's/housebuilder's market.  But maybe I'm biased after moving from CA.

Yes, the plans to cut up the countryside are discouraging.  The promises (from the local councils) to revive the town centres seem to be false, and only house plans for car reliant areas are realized.   One of the things about living in Britain that feeds my soul and increases my quality of life astronomically is the natural beauty.  I've never lived in a more beautiful place.  Would be a shame to see ant-hill type housing here.

Is that true (higher demand for housing in the UK)?  Seems like there is a huge demand (hence the ridiculous house craze) in the States!  Combined with the 0% loans and refis, makes for a seller's/housebuilder's market.  But maybe I'm biased after moving from CA.

Yes, the plans to cut up the countryside are discouraging.  The promises (from the local councils) to revive the town centres seem to be false, and only house plans for car reliant areas are realized.   One of the things about living in Britain that feeds my soul and increases my quality of life astronomically is the natural beauty.  I've never lived in a more beautiful place.  Would be a shame to see ant-hill type housing here.

One of the big thing that fuels house prices here are the high number of multipliers lenders are willing to give to the average Joe.  If you can get 5 times your income or many times a joint income from a mortgage lender then people will be able to buy more.  The obvious danger is if interest rates skyrocket, it could be a reposessors dream.

The other factor, I reckon is that you've got limited space to build new housing, especially where the jobs are, hence the highest prices in the South East.  Remember that the entire UK can fit inside the State of Colorado.  Even if people only lived along the coast of California, there's probably much more space for people to live than in the UK.  And there's only about half the number of people in California than there is in Britain.

I do agree it is a beautiful country and I hope they don't go tearing up the countryside to satisfy short term problems with housing.

Matt