Paschal Donohoe (Dublin Central, Fine Gael)
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To ask the Minister for Finance in view of the tax relief at source being reduced after seven years for first-time buyers and that the amount of relief available will be substantially reduced, if he will review the current monetary cap against which mortgage interest relief is awarded to first-time buyers; and if he will make a statement on the matter. [15756/13]

Michael Noonan (Limerick City, Fine Gael)
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The position is that in Supplementary Budget 2009, mortgage interest relief was limited so that interest payable on a qualifying home loan would only qualify for tax relief for the first seven tax years of the life of that loan (7 year rule). However, in Finance Act 2010, mortgage interest relief was extended up to the end of 2017 for those whose entitlement to relief was due to end in 2010 or after (i.e. those who purchased in 2004 or after). Accordingly, individuals who took out qualifying loans in the period 2004 to 2012 will continue to be entitled to mortgage interest relief up until the end of 2017.

It should be noted that, where there is an entitlement to mortgage interest relief, it is available at varying rates and subject to certain ceilings. For example, individuals who are in the first seven tax years of their qualifying loan are entitled to a higher interest ceiling, on which the rate of relief is applied. For such individuals, the interest ceilings are €10,000 per annum for a single individual and €20,000 per annum for married couples and civil partnerships. For individuals who have an entitlement to mortgage interest relief and who are in their eighth or subsequent years of their qualifying loan a lower interest ceiling applies. For such individuals, the interest ceilings are €3,000 per annum for single and €6,000 per annum for married couples/civil partnerships. Therefore, some individuals will experience a reduction in the level of relief they receive as they enter into their eighth and subsequent years of their qualifying loans. However, they will continue to receive mortgage interest relief up until the end of 2017.

The system of mortgage interest relief is designed and targeted in such a way that the relief is of greater value in the early years of a qualifying loan where the interest represents a greater proportion of the repayment. Mortgage interest relief is of lesser value to individuals whose repayments are made up of a higher proportion of principal than interest, as would generally be the case for those who moved in to the eighth and subsequent years of their loans.

Given the current budgetary constraints I have no plans to amend the scheme along the lines proposed.

As you will appreciate, I receive numerous requests for the introduction of new tax reliefs and the extension of existing ones. You will also appreciate that I must be mindful of the public finances and the many demands on the Exchequer.