Ireland Financial News – Mortgages & Banking

It has emerged that 57,000 people currently receiving mortgage interest relief will no longer be entitled to it from tomorrow.
Read the full Revenue statement

For more information from Revenue
According to the Revenue Commissioners, as of the end of last year, there were 562,000 people receiving mortgage interest relief.

However the entitlement is to be suspended from 1 May for everyone except first-time buyers.

The move follows the announcement by the Government in it is supplementary Budget to limit mortgage interest relief to seven years.

Last night Opposition parties in the Dáil accused the Government of creating confusion over the issue.

Under the new system the tax relief on monthly mortgage interest payments will only apply for the first seven years after someone buys a property for use as their home.

According to the Revenue Commissioners, the move means mortgage interest relief will be suspended for 321,000 of the 562,000 people currently receiving the entitlement.

Of those, Revenue says 57,000 people will definitely no longer be entitled to it.

It says it is in the process of working with mortgage lenders in establishing who is and who is not entitled to the relief.

Mortgage holders who have the relief suspended but are entitled to continue to receive it will have it reactivated in June, all arrears included.

220,000 first time buyers will not be affected by tomorrow’s move and will continue to receive the entitlement.

Minister for Finance Brian Lenihan has said that this afternoon’s Budget will not be easy for anyone, but that it will be fair.Mr Lenihan is to announce the details of the Budget, which is expected to impose extra taxes and spending cuts worth around €3.5bn.

The Cabinet will meet in Government Buildings this morning for a final discussion on the Budget, but at this stage the decisions have already been taken.

After ten sessions, Ministers hope they have a package that can start the recovery of the national finances and will commend itself to the public and the international markets.

Last night, Minister Lenihan said the tax base had declined dramatically and has to be repaired.

He said everyone will make some contribution, though those who have the most will pay the most.

Mr Lenihan is keenly aware that taking too much money out of the economy could create a deflationary spiral, while not taking enough may lead international markets to doubt the Government’s resolve.

The Budget is expected to set out a three- to four-year framework for restoring the public finances.