.McCreevy): The issue raised by the Deputy relates to the new scheme of administering tax relief in respect of qualifying mortgage interest – tax relief at source. The Deputy should be aware that this policy change was in fact announced in last year's budget. The essence of this scheme is that from 1 January next, tax relief on qualifying mortgage interest will no longer be administered through the tax system but will instead be given at source by the mortgage lenders. This means that the tax relief element will be given to the borrower at the time the payment is made to the mortgage lender and will result in a lower mortgage payment at source.
The change to tax relief at source was made with a view to putting in place a much simpler and more efficient method of administering tax relief on mortgage interest. Any adjustment in interest rates as well as any change in the amount of interest payable as the mortgage matures will be immediately reflected in the amount of tax relief given. In addition it will also extend for the first time tax relief on mortgage interest to those whose income is too low to avail of the relief under the current system.
While the lending institutions will administer tax relief on mortgage interest from 1 January, 2002, there are no plans for the Revenue Commissioners to pay fees to the institutions in relation to the operation of the scheme.
The Finance Act 2001, section 23(5)(f2>a)(iv), makes provision for the transmission by the Revenue Commissioners of certain information to the lenders, that is necessary for the operation of the scheme. I am satisfied that the provision of this information is not in breach of privacy.