Saturday 16 December 2017

Ailish O'Hora: Retrograde move to phase out mortgage interest relief for hard-pressed homeowners could well backfire

About 300,000 hard-pressed homeowners will be hit by the move (Stock picture)
About 300,000 hard-pressed homeowners will be hit by the move (Stock picture)

Ailish O' Hora

The move to phase out mortgage interest relief will be a big talking point as Budget 2018 is digested later today and in the weeks to come.

About 300,000 hard-pressed homeowners will be hit by the move.

Finance Minister Paschal Donohoe will announce today that the relief will drop from 100pc to 75pc in 2018, 50pc in 2019 and 25pc in 2020.

Many of these people are the very ones struggling to hold onto their homes at a time of a massive housing crisis.

The relief applies to those who bought their homes between 2004, while the boom was in full flow, and up to 2012, when the recession had already hit hard.

The value of the relief is based on the amount of interest that you pay in a tax year on a qualifying mortgage loan.

But will a public backlash ensue?

This measure, which is likely to prove very unpopular with the so-called 'squeezed middle' or those "who get up early in the morning" could be revisited in the Finance Bill which is due to be published on the 19th of this month.

Indeed it could be extended again in 2020 as it was in 2017.

Watch this space.

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