Noel Ahern (Dublin North West, Fianna Fail)
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Question 89: To ask the Minister for Finance the position regarding first time buyers who bought houses towards the end of 2003 and are now in negative equity and losing their entitlement to mortgage allowance; if he will outline the changes in the 2010 Finance Bill on mortgage relief; if it applies to those who purchased in late 2003; and if he will make a statement on the matter. [30924/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Mortgage Interest Relief for first time and non first time buyers is limited to the first seven tax years for which an individual has entitlement to the relief. The Finance Act 2010 provides for an extension of the relief up to the end of 2017 for those whose entitlement to relief was due to end in 2010 or after. Those who took out mortgages in 2003 would have seen their entitlement end after 2009 so, accordingly, this measure does not apply to these individuals. While circumstances and house prices differ, it is necessary to select a cut-off point in these matters.

In addition, the Finance Act 2010 also provides that qualifying loans taken out on or before 31 December 2011 will continue to get relief at current levels. Qualifying loans taken out in 2012 will receive the relief at a reduced rate of 15% for first-time buyers and 10% for non-first time buyers with ceilings of €6,000 per annum for married couples and €3,000 per annum for single individuals applying in both cases. Loans taken out on or after 1 January 2013 will not qualify for mortgage interest relief and the relief will be abolished completely for the tax year 2018 and subsequent tax years.

I would accept that many people are suffering financially in the current climate. However, as the Deputy will be aware there are already a number of supports in place, such as the Code of Conduct on Mortgage Arrears (CCMA), the Mortgage Interest Subsidy Scheme and the services provided by the Money Advice and Budgeting Service. I have spoken about these extensively in this House over the past number of months. In February this year, the moratorium on mortgage arrears was extended from 6 months to 12 months for all mortgage lenders.

The Deputy will also be aware that, at the end of February, I announced the establishment of the Mortgage Arrears and Personal Debt Expert Group, under the chairmanship of Mr. Hugh Cooney, an insolvency accountant, as a follow up to the Government's commitments towards Protecting the Family Home under the Renewed Programme for Government. The Expert Group has completed the first phase of its work and submitted an Interim Report to me last week. The Deputy will be aware that all of the recommendations contained in this report were agreed by Government on Tuesday 6 July 2010. I believe that these recommendations, when implemented, should result in (a) improved communication; (b) a more consistent assessment process by lenders of options for borrowers in difficulty through the use of a Standard Financial Statement; and (c) the introduction of an industry-wide Mortgage Arrears Resolution Process (MARP) including a range of forbearance measures. All of these will be of real help to those in difficulty.

While the recommendations set out in this report are designed to address the more straightforward issues uncovered by the Expert Group during its data gathering phase, I understand that in the next phase of its work the Expert Group will be focusing on the more complex issues in the area of mortgage arrears and personal debt. I expect to receive their final report by the end of September.