Brendan Griffin
Question:197. Deputy Brendan Griffin asked the Minister for Finance his views on a matter raised by a person (details supplied); and if he will make a statement on the matter. [9702/16]
View answerTuesday, 17 May 2016
Questions (197)
Written answers
Any mortgage account which is currently subject to mortgage interest relief will continue to be so entitled up until 31 December 2017. The amount of relief payable will be calculated based on the amount of interest actually paid by the borrower on the loan within that period and subject to the ceilings and rates applicable to the loan borrower.
On foot of a change I introduced in Budget 2012, first time buyers who bought at the height of the property boom between 2004 and 2008 receive a rate of mortgage interest relief of 30%. 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 i.e. up to the end of 2017. In the absence of this change the mortgage interest relief available would have gradually reduced to a rate of 15%.
Single individuals, married couples and civil partners 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 ceilings of €3,000 and €6,000 respectively.
The system of mortgage interest relief is designed and targeted in such a way that the relief is of greater value in the early years of a qualifying loan where the interest represents a greater proportion of the repayment. Mortgage interest relief is of lesser value to individuals whose repayments are made up of a higher proportion of principal than interest, as would generally be the case for those who move in to the eighth and subsequent years of their loans. It is worth noting that the application of the ceilings already work to reduce the relief available in a gradual manner. In addition, as the amount of interest payable reduces as a mortgage is paid down, the level of mortgage interest relief also reduces in tandem.
In the Programme for Partnership Government there is a commitment to retain mortgage interest relief beyond the current end date of December 2017 on a tapered basis. You will note that the current end date is December 2017 and the future of mortgage interest relief will be considered in due course.