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

I refer to an e-mail I received from a constituent which is representative of a common situation. The constituent bought a two-bedroomed apartment for €420,000 in 2006. A first child was born in 2009 and a second child was born in 2011. This apartment is now valued at €169,000. This is a stark illustration of the burden that negative equity places on many people. Despite the difficulty of being in negative equity, this couple can still pay the mortgage with difficulty. They could pay another mortgage but they remain living in an apartment that is far too small for the needs of their family. They are in a trap. They cannot sell the apartment, nor do they wish to do so. However, if they decide to rent out the apartment in order to cover the cost of the mortgage and then rent or buy a home, either a house or a large apartment for their family, a number of things will happen. If they buy a second property, the Revenue Commissioners will classify the first property as an investment property. They will lose tax relief at source on the original property. The second property is then regarded as a second home and is liable to the second-home tax. They can afford to cover the rent on a second house or a larger property but they are then classified as investors by the tax system while they are anything but that. They are just looking to find a home for their family. This is a stark example of the difficulty being created by the tax system for people already bearing a very significant burden of a mortgage and negative equity. I ask the Minister of State what can be done to create imaginative arrangements to accommodate those who are looking to change home.

While they would be able to bear the cost, the tax system acts as a barrier to taking this step. I ask the Minister of State to give some thought to addressing this issue creatively to accommodate people who can afford to move to homes of an appropriate size and with appropriate facilities to raise their families but require some support from the system if they are to do so.

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