Dáil Éireann Debate, Tuesday - 12 February 2013
199. Deputy Brendan Griffin asked the Minister for Finance his views that recipients of mortgage interest relief in respect of homes that were bought at the height of the boom will be losing the relief this year and next year; if he has any further measures planned to assist these people; and if he will make a statement on the matter. [6589/13]
View answerThe position is that in Supplementary Budget 2009, mortgage interest relief was limited so that interest payable on a qualifying home loan would only qualify for tax relief for the first seven tax years of the life of that loan (7 year rule). However, in Finance Act 2010, mortgage interest relief was extended up to the end of 2017 for those whose entitlement to relief was due to end in 2010 or after (i.e. those who purchased in 2004 or after).
Accordingly, individuals who took out qualifying loans in the period 2004 to 2012 will continue to be entitled to mortgage interest relief up until the end of 2017.
It should be noted that, where there is an entitlement to mortgage interest relief, it is available at varying rates and subject to certain ceilings. For example, individuals who are in the first seven tax years of their qualifying loan are entitled to a higher interest ceiling, on which the rate of relief is applied. For such individuals, the interest ceilings are €10,000 per annum for a single individual and €20,000 per annum for married couples and civil partnerships. For individuals who have an entitlement to mortgage interest relief and who are in their eighth or subsequent years of their qualifying loan a lower interest ceiling applies. For such individuals, the interest ceilings are €3,000 per annum for single and €6,000 per annum for married couples/civil partnerships. Therefore, some individuals will experience a reduction in the level of relief they receive as they enter into their eighth and subsequent years of their qualifying loans. However, they will continue to receive mortgage interest relief up until the end of 2017.
Furthermore, as you are aware, this Government is fully committed to helping address the particular problems faced by those that bought homes at the height of the property boom between 2004 and 2008. In this regard, in Budget 2012, I announced my intention to fulfil the commitment in the Programme for Government to increase the rate of mortgage interest relief to 30 per cent for first time buyers who took out their first mortgage in that period.
First time buyers will qualify for the increased rate if they made their first mortgage interest payment in the period 2004 to 2008 or if they drew down their mortgage in that period. The rate of tax relief on the interest paid on such loans will, for the tax years 2012 to 2017, be 30%. A document which illustrates the maximum gains for such individuals is available on the Department of Finance’s tax policy website at http://taxpolicy.gov.ie/wp-content/uploads/2011/12/Mortgage-Interest-Relief.pdf .
