Dáil Éireann Debate, Wednesday - 17 September 2014
291. Deputy Róisín Shortall asked the Minister for Finance if he will keep the mortgage interest relief ceiling at €10,000 for single people and €20,000 for a couple until 2017, in view of the continuing financial difficulties faced by many first-time buyers; and if he will make a statement on the matter. [34366/14]
View answerThe Deputy will be aware that mortgage interest relief has been abolished for homes purchased since 1 January 2013. Up until 2018, tax relief continues to be available for interest paid on all qualifying home loans taken out on or after 1 January 2004 and on or before 31 December 2012, regardless of whether the individuals concerned are first-time buyers or non-first-time buyers.
This Government is 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 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. This was the period during which house prices peaked. This 30% rate will continue to be applicable to these first-time buyers for the remaining years that mortgage interest relief continues to be available. In the absence of this change the mortgage interest relief available would have gradually reduced to a rate of 15%.
Single individuals and couples that are first-time buyers, qualify for mortgage interest relief for the first seven years of their mortgage up to a maximum ceiling of €10,000 and €20,000 respectively. Thereafter relief is restricted to a ceiling of €3,000 and €6,000 respectively. A large cohort of individuals that bought at the peak of the market have already become subject to the lower ceilings for interest relief. However, the increased rate of relief introduced in Budget 2012, has acted to compensate those individuals.
Given that mortgage interest relief has now lapsed in terms of new qualifying loans, I am not convinced of the merits of revisiting the provisions.
