Éamon Ó Cuív (Galway West, Fianna Fail)
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136. To ask the Minister for Finance if he intends introducing a mortgage interest tax credit for first-time buyers of new or second-hand properties to assist them to deal with the challenge of ever-increasing interest rates; and if he will make a statement on the matter. [55043/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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While I am aware that there have been increases in certain mortgage rates by some lenders, it is important to point out that mortgage interest rates, in particular fixed interest rates, have fallen over the past number of years. In addition, it is also important to point out that a significant portion of new mortgages, are now fixed rate mortgages and this will protect borrowers in the event of a rise in official and market interest rates at least for the period that the interest rate is fixed.

It is also worth noting that there is additional scope for many borrowers, in particular variable rate mortgage borrowers who have now built up equity in their home to look at alternative mortgage options and to reduce their mortgage costs.

In relation to Mortgage Interest Relief (MIR) the position is that the relief was phased out on a gradual basis over the period 2009 to 2020. Furthermore, the decision to abolish MIR was taken in the wake of the financial crisis with the cost of the relief being one of the influencing factors. MIR cost over €700 million in 2008. It should also be noted that, prior to its curtailment and eventual abolition, and as pointed out by the 2009 Commission on Taxation, in 2005, the top two income deciles accounted for close to half of the tax forgone through the measure. The relief cost about €280 million in 2005.

As the Deputy will be aware, the Summer Economic Statement set out the fiscal parameters for this year’s Budget. A tax package of over €1.1 billion was announced in Budget 2023, which included a substantial income tax package. Budget 2023 also included a substantial cost of living package and a large range of one-off measures to assist households with cost of living pressures. Therefore, I have no plans to reintroduce MIR at this time. It should also be noted that the recent report of the Commission on Taxation and Welfare put forward no case or recommendation for the reintroduction of MIR.

Finally, in relation to first time buyers the Help-to-Buy scheme has been in place since 2016. This scheme, which is expected to cost about €175 million in 2022, can help with a deposit to purchase or self-build a new house or apartment. The scheme, with an enhanced level of support of up to €30,000, has been extended again for a further two years until the end of 2024.