Written answers

Wednesday, 9 May 2018

Department of Finance

Mortgage Interest Relief Application

Photo of Thomas ByrneThomas Byrne (Meath East, Fianna Fail)
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92. To ask the Minister for Finance his plans to offer relief to home owners that took out mortgages in recent years and now face potential interest rate increases. [20376/18]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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At present, there are no plans to provide specific additional income tax relief for mortgage payments, as the Government’s priority is on reducing the income tax burden for low to middle income earners, while limiting the benefit for high earners and keeping the tax base broad.

As indicated in the last two Budgets, Mortgage Interest Relief is being phased out.  The residual availability of the relief will taper out over the next three years before ceasing at the end of 2020.  These developments reflect commitments contained in the Programme for a Partnership Government and the policy framework contained in the confidence and supply arrangement negotiated by Government. 

My Department published guidelines for the evaluation of potential tax expenditures in October 2014 ().  Drawing on economic evidence, these made clear that it is important that any policy proposal which involves tax expenditures should only occur in limited circumstances where there are demonstrable market failures and where a tax-based incentive is more efficient than a direct expenditure intervention.

A view that causes concern is that mortgage interest relief can effectively become priced-in to the purchase price of the property.  It is therefore not considered efficient to allocate further funds solely to minimise mortgage interest payments.  Instead, my focus is on a more general reduction of income tax across all income earners, with a particular focus on those on low to middle incomes as already indicated.

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