Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

As the Deputy and the House will be aware, mortgage interest relief for principal private residences was phased out on a gradual basis over the period between 2009 and 2020. The decision to abolish this relief was taken in the wake of the financial crisis, with the cost of the relief being one of the influencing factors. For example, in 2008 the scheme cost in excess of €700 million per annum. In addition, it should be noted that prior to its eventual abolition, the top two income deciles accounted for close to half the tax forgone through tax relief. This was an issue highlighted in the findings of the Commission on Taxation's 2009 report.

I am aware there has been an increase in certain mortgage rates by some lenders. However, it is important to note that mortgage interest rates, and in particular fixed interest rates, have fallen over the past number of years. It is also worth noting that a significant proportion of new mortgages are now fixed-rate mortgages and this will play a role in the event that interest rates continue to go up.

The introduction or reintroduction of this relief for principal private residences is not the best course of action to assist homeowners with rising rates and would also be very costly. The latest Central Bank data indicate that there were approximately 719,500 primary dwelling mortgage accounts at the end of June, with an outstanding balance of €98.7 billion. The average interest rate at the end of September was approximately 2.7%. Using those data as a guide, if this relief were reintroduced and granted at the standard rate of income tax, it could cost in the region of €500 million per annum. Even the reintroduction of a more tailored form of this relief would involve very significant costs. For that reason, I am not in a position to accept the Deputy's amendment.

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