Written answers

Thursday, 9 November 2017

Department of Finance

Mortgage Interest Relief Extension

Photo of Willie PenroseWillie Penrose (Longford-Westmeath, Labour)
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55. To ask the Minister for Finance if the mortgage interest relief scheme will be extended for a period of five years and would then be subject to review (details supplied); and if he will make a statement on the matter. [47447/17]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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I announced in Budget 2018 that, in fulfilment of a Programme for Government commitment, mortgage interest relief for owner-occupiers would be extended on a tapered basis to end-2020 for the remaining recipients of the relief.

The process of phasing out Mortgage Interest Relief for homeowners has been under way since 2009. Relief has expired for qualifying mortgages taken out prior to 2004 and, with some limited exceptions, the relief ceased for new borrowings with effect from January 2013.  

Legislation currently provides for the relief to cease for remaining recipients at the end of this year.  I am aware of the financial pressures that individuals continue to face and of the fact that, without any action in the Finance Bill, the relief holders of MIR would have faced a ‘cliff’ where their relief would have ceased entirely from January 1st 2018.  Therefore, Finance Bill 2017 provides for the relief to be continued on a reducing basis for a further three years, to allow the remaining relief-holders a period of adjustment in which to adapt to the winding-down of the relief.  Subject to the passing of the Finance Bill, the effect of the measure will be to provide for 75% of the current relief to be continued into 2018, 50% of the current relief into 2019 and 25% of the current relief into 2020.  The relief will then expire at end 2020.

It must be remembered that this relief has ceased for homeowners who purchased before 2004, and that those who purchased their homes from 2013 onwards have never benefitted from the relief. It is my view that this tapered extension of the relief for a three-year period strikes an appropriate balance between supporting those current recipients and also considering fairness to homeowners who have never benefitted from the relief.

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