Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I move amendment No. 8:

In page 13, before section 9, to insert the following new section:
9.—Section 244 of the Principal Act is amended by inserting the following after subsection (6): “(7) This subsection shall apply to a loan taken out and used by an individual––

(a) on or after 1 January 2012 and on or before 31 December 2012 solely for the purpose of defraying money employed in the purchase of an estate or interest in the land referred to in paragraph (b) and in respect of which the permission in subsection (10) applies but only where a residential premises, which is a qualifying residence in relation to that individual, is constructed on that land, or
(b) on or after 1 January 2012 and on or before 31 December 2013 solely for the purpose of defraying money employed in the construction of a residential premises which is a qualifying residence in relation to that individual on land––

(i) in respect of which he or she has, on or after 1 January 2012 and on or before 31 December 2012, acquired an estate or interest, and
(ii) the acquisition of which was financed by way of the loan referred to in paragraph (a).

(8) This subsection shall apply to a loan in respect of which there was in place, on or after 1 January 2012 and on or before 31 December 2012, an agreement evidenced in writing to provide that loan to an individual and––

(a) part of that loan is used in the period 1 January 2012 to 31 December 2012, and
(b) the balance of that loan is used in the period 1 January 2013 to 31 December 2013, by that individual solely for the purpose of defraying money employed in the repair, development or improvement of a residential premises which is a qualifying residence in relation to that individual.

(9) Any loan to which subsection (7) or (8)(b) applies shall, for the purposes of this section, be deemed to be a qualifying loan taken out on or after 1 January 2012 and on or before 31 December 2012.

(10) Relief shall not be granted in respect of interest paid on any loan to which subsection (7) or (8) applies unless any permission required under the Planning and Development Act 2000 was granted on or before 31 December 2012 in respect of such construction, repair, development or improvement, as appropriate, and such permission has not ceased to exist.".".

Mortgage interest relief is available in respect of interest paid on qualifying loans taken out on or after 1 January 2004 or on or before 31 December 2012 and such relief applies up to and including the tax year 2017. I am mindful of the fact that some individuals who commenced work on the construction or improvement of their homes in 2012 were unable to complete such work in time to be able to avail of the relief on that part of their loan taken out and used in 2013. I have accordingly introduced measures aimed at ensuring that such individuals will be able to avail of mortgage interest relief subject to certain conditions. Mortgage interest relief will now be available for the tax years 2013 to 2017 in respect of interest paid on a loan taken out in 2013 to construct a home or a site but only where such site was bought by way of a loan taken out in 2012, and on interest paid on a loan to repair, develop or improve a home but only where loan approval was in place in 2012 and part of the loan was used in 2012 and the balance was used in 2013 on such repair, development or improvement. Before relief will be granted, any necessary planning permission must have been in place on or before 31 December 2012. This is to remove anomalies in the section.

Members will recall that double interest relief on mortgages was given as an incentive to persons who purchased their homes in 2012 but an anomaly arose where persons rather than purchasing were either building or extending their homes and part of the loan was drawn down in 2012, work was not completed and when they drew down the second part of the loan to complete the work they did not get the relief. I think it would apply to a very small number of cases.