Pat Deering (Carlow-Kilkenny, Fine Gael)
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108. To ask the Minister for Finance when tax relief for mortgages for principal residences will end; his plans to offset the negative financial impact of such a decision on mortgage holders. [19213/15]

Michael Noonan (Limerick City, Fine Gael)
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The Deputy will be aware that mortgage interest relief has been abolished for homes purchased since 1 January 2013. Up until 2018 however, tax relief continues to be available for interest paid on all qualifying home loans taken out on or after 1 January 2004 and on or before 31 December 2012, regardless of whether the individuals concerned are first-time buyers or non-first-time buyers.

This Government is committed to helping address the particular problems faced by those that bought homes at the height of the property boom between 2004 and 2008. In this regard, 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. This 30% rate will continue to be applicable to these first-time buyers for the remaining years that mortgage interest relief continues to be available. In the absence of this change the mortgage interest relief available would have gradually reduced to a rate of 15%.

Single individuals, married couples and civil partners that are first-time buyers, qualify for mortgage interest relief for the first seven years of their mortgage up to a maximum ceiling of €10,000 and €20,000 respectively. Thereafter relief is restricted to ceilings of €3,000 and €6,000 respectively.

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 move in to the eighth and subsequent years of their loans. It is worth noting that the application of the ceilings already work to reduce the relief available in a gradual manner. In addition, as the amount of interest payable reduces as a mortgage is paid down, the level of mortgage interest relief also reduces in tandem.

Given the additional relief already available to those that purchased their homes between 2004 and 2008, over and above that available to other qualifying homeowners and given that mortgage interest relief has now lapsed in terms of new qualifying loans, I am not convinced of the merits of revisiting the provisions at this stage.