Dáil Éireann Debate, Tuesday - 21 November 2017
139. Deputy Catherine Murphy asked the Minister for Finance the rationale for the change in mortgage interest relief that reduces the amount of relief on a sliding scale to the year 2021 by 25% per year; his plans to monitor the effect this reduction will have on qualifying mortgage holders availing of the relief; and if he will make a statement on the matter. [48824/17]
View answerThe provision introduced in Finance Bill 2017 will extend Mortgage Interest Relief up to and including the year 2020 for the remaining recipients. This measure extends the relief, which would otherwise have ceased completely at the end of 2017, to provide for 75% of the current relief to continue into 2018, 50% of the current relief into 2019 and 25% of the current relief into 2020.
The process of phasing out Mortgage Interest Relief for homeowners has been under way since 2009. Relief has expired for qualifying mortgages taken out prior to 2004 and the relief was abolished for new borrowings taken out after 31 December 2012. Therefore only qualifying borrowings taken out between 2004 and 2012 remain in receipt of the relief.
I am aware of the financial pressures that individuals continue to face and of the fact that, without any action in this Finance Bill, the remaining recipients MIR would have faced a ‘cliff’ where their relief would have ceased entirely in January 2018. This extension allows for a gradual tapered withdrawal of the relief, running between January of 2018 and December of 2020, to allow the remaining recipients a phased period of adjustment to the cessation of the relief. In designing the taper, my Department sought to put in place a mechanism which aimed to provide a smooth withdrawal of the relief over time as well as one which was horizontally equitable. The operation of the measure will be kept under review in conjunction with Revenue.
It must be remembered that this relief has ceased for homeowners who purchased before 2004, and that that those who purchased their homes from 2013 on have never benefited from the relief. This tapered extension of the relief strikes an appropriate balance between supporting those current recipients and also considering fairness to homeowners who have never benefited from the relief.
