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Buy now... or lose €5k yearly relief on homemortgage: No deadline extension

BUY now or forever pay more.

That's the message from the Government today as it warned that mortgage interest relief will end on December 31.

There is no possibility that Finance Minister Michael Noonan will extend the lifespan on mortgage interest reliefs that are worth up to €5,000 a year for first-time buyers.

By ending the scheme he hopes to call the bluff of buyers who are waiting for house prices to reach rock bottom.

Junior Minister Brian Hayes said that buyers must act now or the "train will have left the station".

"This is an offer of a lifetime, it won't come again," said Mr Hayes. "All our futures are based on getting the property market going again. People need to act fast to avail of it."

The Cabinet is likely to face calls for an extension to the scheme as the property market continues to struggle.

Recent studies have suggested that first-time buyers are beginning to re-emerge but the market is far from stable.

Under the mortgage interest relief scheme buyers get up to €5,000 a year for seven years in mortgage interest relief.

Mr Noonan said his scheme was aimed at breaking the "rainy-day" mentality among under-35s.


Mortgage interest relief will not be available for anyone who buys a house from next year on, and it will be fully abolished by 2018.

But for those buying their first property this year, Mr Noonan increased the amount from of relief 15pc to 25pc.

The offer applies not just to the purchase of a house, but the "repair, development or improvement of a claimant's principal private residence".

Mr Hayes said that people now faced the choice of stalling or entering the market in time to make big savings.

"If they don't get on it now, the train will have left the station and it will be too late to act," the Dublin South West TD said.

"People should be aware that it's coming to an end, and they should buy if they can," Mr Hayes added. "It seems to have been quite successful in getting transactions going."

Mr Noonan's proposals were designed at breathing some life into the property market, targeting those who may have wanted to hold off buying a house.

"I think the psychological effect is to save rather than invest," Mr Noonan said when he unveiled his proposals.

"Everybody has a rainy day mentality and I'm trying to break that."