John Browne (Wexford, Fianna Fail)
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223. To ask the Minister for Finance if non-first-time buyers in the 2004 to 2008 period can expect to have assistance similar to the increased interest relief for first-time buyers; if the concentration of relief on first-time buyers is discriminatory against non-first-time buyers who traded down or up in the period; and if he will make a statement on the matter. [13352/14]

Michael Noonan (Limerick City, Fine Gael)
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The position is that in Finance Act 2010, mortgage interest relief was extended up to end of 2017 for those whose entitlement to relief was due to end in 2010 or after.  Therefore, tax relief will continue to be available in respect of interest paid by an individual on qualifying home loans taken out on or after 1 January 2004 and on or before 31 December 2012, regardless of whether they are considered first-time buyers or non-first-time buyers

In Budget 2012, I fulfilled the commitment in the Programme for Government to increase the rate of mortgage interest relief to 30 per cent for first-time buyers who took out their first mortgage in that period. This was the period during which house prices peaked.

A mortgage holder qualifies for the increased rate if they made their first mortgage interest payment in the period 2004 to 2008 or if they drew down their mortgage in that period. In addition, the increased rate of tax relief for first-time buyers who took out their first mortgage in that period will continue up to and including the 2017 tax year.

A lower rate of relief is provided for non-first time buyers in view of the fact that such individuals would have already received the first-time buyers rate of relief for the first seven years on their qualifying home loans and that the proportion of interest on their subsequent repayments would be significantly lower. Those individuals trading up or down in the period 2004 to 2008, would also be likely to have an element of capital to utilise towards the purchase of their second or subsequent dwelling, which should have led to a reduced borrowing requirement on the relevant property.

Given that mortgage interest relief has now been abolished for mortgages taken our since 1 January 2013, I do not propose to revisit the legislation with a view to introducing further changes.

John Browne (Wexford, Fianna Fail)
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224. To ask the Minister for Finance the status of owners of buy-to-let properties who bought during the 2004 to 2008 period in regard to heavy mortgage repayments which are not covered by rental payments; if he will consider restoring 100% tax relief on interest for buy-to-let owners who bought during the period in question as a first step in restoring full relief for all buy-to-lets; and if he will make a statement on the matter. [13353/14]

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.

I am informed by the Revenue Commissioners that, regardless of when a buy to let property is purchased, rental income for tax purposes from such property is the gross rental income less allowable expenses incurred in earning that rent, as specified in section 97(2) of the Taxes Consolidation Act 1997. The main deductible expenses are:

- any rent payable by the landlord in the case of a sub-lease;

- the cost to the landlord of any goods provided or services rendered to a tenant;

- the cost of maintenance, repairs, insurance and management of the property;

- the interest paid on borrowed money used to purchase, improve or repair the property (which, in the case of residential property, is restricted to 75% of the interest and is subject to compliance with PRTB registration requirements for all tenancies that existed in relation to the property in the relevant year); and

- payment of local authority rates.

In addition, wear and tear capital allowances are available in respect of the capital expenditure incurred on fixtures and fittings provided by a landlord for the purposes of furnishing rented residential accommodation. These allowances are granted at the rate of 12.5% per annum of the actual cost of the fixtures and fittings over a period of 8 years.

Where the aggregate of deductible expenses in any year exceed the gross rental income, the amount of the deficit is set against rental profits of the same year from other property. Where there are no other rental profits in the same year, the deficit is carried forward as a rental loss for offset against rental profits in future years.

The 75% restriction on interest on borrowed money used to purchase, improve or repair residential property was introduced in the April 2009 supplementary budget as part of an urgent revenue-raising package aimed at stabilising the public finances.