Michael McGrath (Cork South Central, Fianna Fail)
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This Government is acutely aware of the impact of rising interest rates and mortgage costs on many taxpayers. It is for this reason, I introduced a temporary one-year, targeted form of mortgage interest tax relief as part of Budget 2024.

As previously outlined, in reply to Parliamentary Question 104 of the 18 October 2023, it is not possible or desirable for the Government to alleviate the full impact of the increased interest rates for all mortgage holders.

In relation to the Deputy’s specific question, this Government is of the view, that taxpayers with mortgages balances of less than €80,000 on 31 December 2022, are in general more likely to be in a relatively strong financial position in comparison to those with larger mortgage balances. Therefore, it is reasonable to expect that they should have greater capacity to absorb the impact of the recent increases in mortgage rates.

In addition, such individuals are likely to have significant amounts of equity built-up and have relatively low “loan to value” ratios. This means that such individuals should have better opportunities to switch their mortgages and obtain more favourable interest rates, which will ultimately reduce their interest liability without the need for Government intervention.

Finally, it is important to point out that if the qualifying threshold for mortgage balances had of been set below €80,000 then it would have resulted in a less targeted scheme and as a consequence increased the cost on the Exchequer.