Dáil Éireann Debate, Tuesday - 6 November 2012
190. Deputy Dara Calleary asked the Minister for Finance the reason first time house builders are being treated differently to first time house buyers in terms of availing of mortgage relief; and if he will make a statement on the matter. [47260/12]
View answerThe position is that a residence under construction may have various payments made throughout the course of construction in respect of which money may have been borrowed (e.g. on the purchase of the site and at various stages of the construction). On the understanding that the residence under construction will, when completed, become the individual’s sole or main residence, tax relief is generally afforded on the interest paid on monies used to purchase the site and on interest paid on monies used to fund various stages of construction. However, where the residence when completed does not become the sole or main residence of the individual, any tax relief granted on interest paid will be recouped.
As the Deputy is aware, tax relief on interest paid on all qualifying home loans is being phased out. Tax relief on interest paid on qualifying home loans taken out in the period 1 January 2004 to 31 December 2012 will continue up to and including the 2017 tax year. However, tax relief is not available on interest paid on loans taken out on or after 1 January 2013. Likewise, where a residence is under construction, only the interest paid on monies drawn down on or before 31 December 2012 will qualify for tax relief.
A qualifying loan for mortgage interest relief is one which without having been used for any other purpose, is used in purchase, repair, development or improvement of a claimant’s principal private residence.
As with all time-limited reliefs, there will always be people who just miss out, and that is why I have been as flexible as possible with the legislation within the current budgetary constraints. However, I do not intend to extend the parameters of mortgage interest relief any further.
