Property groups call for extension of mortgage interest relief
PROPERTY market groups are calling for extra supports, including extending the mortgage interest relief scheme for buyers, to help restart the housing market, ahead of December's Budget.
The Professional Insurance Brokers Association (PIBA), which represents financial advisers, has called for mortgage interest relief to be extended for a further two years. The scheme should be extended for both first-time buyers and for people moving house, it said.
The tax relief for people buying a home is set to be phased out next year.
PIBA said it should be retained, so as not to hinder any recovery in the housing market.
Currently first-time buyers receive mortgage interest relief at 25pc while anyone who has previously owned a home receives relief at a rate of 15pc.
The relief is paid by the Revenue Commissioners to the mortgage lender, and effectively means borrowers make smaller monthly repayments.
The scheme means a saving of €18,000 over seven years for a couple taking out a €300,000 mortgage at a 4.25pc interest rate, if they buy a house before the end of this year, the organisation said.
It also called for an end to rules that mean anyone building a home, and drawing down their mortgage in stages, only gets mortgage interest relief on the share of the debt drawn down before the end of the year.
Meanwhile, builders' group the Construction Industry Federation (CIF), said the Government should impose mandatory lending targets for new mortgages on the banks, to help kick- start the housing market.
The lobby group also recommended in its pre-budget submission that anyone buying a newly built home should get a 10-year holiday from the property tax.
It said the tax break would be justified by VAT and development contributions involved in new builds.