Monday 23 April 2018

NAMA home buyers may miss tax relief

Donal Buckley

Many home buyers could lose out on thousands of euros worth of mortgage interest tax relief because of NAMA.

Home buyers have less than 10 weeks to ensure that they qualify for the mortgage interest tax relief as it is due to end this year.

But NAMA has been very slow to sell off many of the houses and apartments which it has taken off banks and developers.

This delay is all the more surprising considering that the state agency may be losing out on selling opportunities at a time when there is a shortage of family houses in areas of Dublin as there has been a drop in the number of homes for sale.

In Dublin, the number for sale dropped by about 30pc in the first nine months of the year to around 4,000 last month.

Last year, NAMA said it would introduce a price guarantee for people buying its properties but it was not until May of this year that it launched the first of these and then it brought only 115 houses to the market on a pilot basis in the Dublin, Meath and Cork markets.

With the clock ticking on mortgage interest relief, there has clearly been an upsurge in home buying activity, especially among first-time buyers.

But there was nada from NAMA. Six weeks into a sales season which would usually wind down in December, and nothing has been launched by NAMA.

Last week, its chief executive Brendan McDonagh finally declared that it will "shortly" announce details of the next phase of this initiative. Another week later and no more houses.

If the pace of activity to date is replicated, in the next 10 weeks then less than half of these homes might be offered for sale this year.

But it's not the quantity alone that is the issue. It's the fact that it takes so long for buyers to get mortgage approval. Furthermore, mortgage approval will not be enough to qualify for the tax relief.

Buyers will need to have drawn down the mortgage before December 31 in order to qualify.

To make up for this and its delays, NAMA needs to ensure that it accelerates the sales process for all those buyers who need the thousands of euros in tax relief in order to help them to buy one of NAMA's homes.

Indo Property

Life Newsletter

Our digest of the week's juiciest lifestyle titbits.

Editors Choice

Also in Life