Mortgage interest relief deal to end
THERE will be no extension to a generous tax-relief deal for first-time buyers who buy before the end of this year, Finance Minister Michael Noonan insisted yesterday.
He said the higher relief would protect buyers from falls of up to 10pc in house prices. The relief is worth up to €5,000 over a full year for a couple who buy before December 31.
The incentive means first-time home buyers receive mortgage-interest relief at 25pc and non- first-home buyers receive relief at 15pc.
But anyone who buys after the end of this year will not get any mortgage tax relief.
The minister advised anyone thinking about buying to make sure they leave themselves enough time to complete the paperwork to ensure they qualify for the relief.
Experts had claimed the relief would be extended if there was no pick-up in the market.
Mr Noonan said: "I want to emphasise that this mortgage-interest relief measure will come to an end at the end of this year.
"There will be no extension to this measure and prospective purchasers should make sure to factor in the time required between purchase and mortgage drawdown to qualify for mortgage-interest relief."
He said the residential property market will probably bottom out this year, and claimed that even if it does not the mortgage tax relief could provide a "cushion" of around 10pc to cover falling prices.
Irish Banking Federation figures show that a record low of just 2,630 mortgages worth €450m were drawn down in the first quarter of this year.
Of those mortgages, 1,211 were first-time buyers, with a total value of €198m.
Mr Noonan, who was addressing a new lobby group Property Industry Ireland (PII), insisted when questioned about previous extensions to incentives: "You can take it there will be no rollover on this."