Ireland Considers Reintroducing Tax Relief on Mortgage Interest Payments
Ireland’s Prime Minister, Leo Varadkar, has stated that the government is considering reintroducing tax relief on mortgage interest payments. However, any scheme is likely to be limited to borrowers who have been hit hardest by rising interest rates.
The government ended a broader scheme in 2020 that had offered tax relief to borrowers who had taken out mortgages in the lead-up to and aftermath of Ireland’s 2008 banking crash. Since then, there have been calls from opposition politicians to reopen the scheme with each European Central Bank rate hike.
Varadkar acknowledged the need to support those most affected by high interest rates and the risk of losing their homes. He stated that a broad-based relief scheme would be prohibitively expensive, so any assistance to borrowers would be specifically targeted at those paying the highest rates.
While the details of the scheme have not been finalized, relevant ministers are working on the matter ahead of the 2024 budget, which is scheduled to be published on October 10.
The latest data from Ireland’s central bank showed a 4% quarter-on-quarter decrease in the total stock of mortgages in arrears in the three months to June. However, there was an increase in the number of borrowers unable to pay for between 90 days and one year.
Derville Rowland, Deputy Governor of the Central Bank of Ireland, emphasized the importance of remaining vigilant for emerging issues in the current economic environment, despite the overall decline in mortgage arrears.
Incorporating tax relief on mortgage interest payments could provide crucial support to borrowers struggling with rising rates and financial difficulties. However, any new scheme will need to strike a balance between affordability and the cost to the government.
The government’s decision on reintroducing tax relief on mortgage interest payments will be eagerly awaited by borrowers, who hope for some relief amid challenging economic conditions.
Disclaimer: This article is for informational purposes only and should not be construed as financial or legal advice. Please consult with a professional advisor or financial institution for specific guidance tailored to your situation.