Rush to get tax relief to spark house sales surge
PROPERTY experts have predicted a surge of new buyers over the next three months, as young couples rush to benefit from generous mortgage tax breaks that are due to go.
A first-time couple who borrow €150,000 for a house will get €1,688 in mortgage tax relief next year alone if they buy before December 31.
But if the buyers wait until next year there will be no mortgage tax relief.
The relief is paid by the Revenue Commissioners to the mortgage bank, and effectively comes off the monthly repayments. Now a new survey by MyHome.ie shows that around a third of those under 40 are planning to buy before the end of the year to get the bumper tax relief.
However, finance experts said many of these will not be able to get a mortgage from their bank.
The survey also found that 63pc of those under the age of 40, who are living at home or renting, want to buy in the next 12 months. MyHome.ie managing director Angela Keegan said the findings underlined the importance of the mortgage interest relief measures.
She urged the Government to extend the tax relief, which could be worth up to €27,500 to a couple buying their first home.
"We are seeing more transactions now and that is a positive as the market starts to recover. However, we don't want to see a situation where people feel rushed into buying a property.
"Eighty-eight per cent of respondents to this survey believe the mortgage interest relief measure should be extended and we would support that call and urge the Government to support hard- pressed consumers and extend it for another year."
There is a fear that if the Government goes ahead with its promise to withdraw the relief at the end of the year there will be a surge in purchases before Christmas, and then a massive dip in sales in the new year.
Calculations by the Construction Industry Federation show that a first-time buyer couple, borrowing €200,000 at 4.5pc, would get €2,250 in mortgage relief for next year.