Dáil Éireann Debate, Tuesday - 4 March 2014
37. Deputy Michael McGrath asked the Minister for Finance if he will address an issue raised in correspondence by a person (details supplied) in Dublin 22 regarding tax relief at source; and if he will make a statement on the matter. [10633/14]
View answerThe situation is that tax relief in respect of mortgage interest paid is available at a number of varying rates and is subject to certain ceilings as provided for in Section 244 of the TCA 1997.
The relief is available up to and including the tax year 2017 on qualifying home loans taken out on or after 1 January 2004 and on or before 31 December 2012.
Individuals purchasing their first qualifying residence within the specified date range are eligible for the higher ceiling, known as the 'first time buyer ceiling', for the first seven tax years of entitlement to mortgage interest relief. The maximum amount of interest paid in respect of this ceiling for which tax relief can be claimed is €20,000 for married/widowed persons and €10,000 for single persons.
For tax year eight and subsequent tax years, the applicable ceiling changes to the reduced 'non-first time buyer ceiling', which applies at maximum rates of €6,000 for married/widowed persons and €3,000 for single persons.
In regard to the specific case to which the Deputy refers, Revenue has confirmed to me that the persons in question were assigned 'first time buyer' status with effect from 1 January 2007, which entitled them to the higher ceiling relief until 31 December 2013 inclusive. In accordance with the legislation, their entitlement to the higher relief expired with effect from 1 January 2014 at which point they became entitled to the lower 'non-first time buyer' ceiling.
I appreciate and very much sympathise with the position of people who are experiencing genuine difficulty in meeting their mortgage payments, particularly those who purchased their homes at the height of the property boom between 2004 and 2008. In this regard, in Budget 2012, I fulfilled 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. In the absence of this change mortgage interest relief rate would have reduced to 15% resulting in maximum relief of €450 per annum.
However, given that mortgage interest relief has now been abolished for mortgages taken out since 1st January 2013, I do not propose to revisit the legislation with a view to introducing further changes.
