Eoghan Murphy (Dublin South East, Fine Gael)
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To ask the Minister for Finance his views on correspondence (details supplied) regarding the residential investment mortgages issue. [57992/12]

Michael Noonan (Limerick City, Fine Gael)
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This question relates to the interest restriction applying to residential lettings, whereby the deductibility of interest in computing taxable rental income from residential property (insofar as it would otherwise be allowable) is limited to 75% of such interest. This restriction was introduced in the April 2009 supplementary budget as part of an urgent revenue-raising package aimed at stabilising the public finances. The reduction in the level at which interest could be claimed for residential rental properties reduced the cost of this relief to the Exchequer by an estimated €95 million in a full year.

The context in which the 2009 measure was introduced, i.e. the need to stabilise public expenditure, still exists. Under the terms of the EU/IMF Programme of Financial Support for Ireland, the State is committed to further substantial reductions in public expenditure.