Struggling families to get €2k a year mortgage relief
TAX BREAK: Homeowners who bought in boom will get extra help
BOOM-TIME buyers in difficulty could save up to €2,000 a year if proposals by the Government in the new Finance Bill are passed by the Oireachtas.
Some 270,000 people are entitled to get more mortgage tax relief in Ireland if the proposals are passed.
Anyone who bought between 2004 and 2008 as a first-time buyer will see their mortgage interest relief increased to 30pc.
Couples will be entitled up to €2,000 a year and individuals up to €1,000 a year, annually until 2017.
And the Government has just made it more attractive to buy a home this year -- but the offer won't be around for long.
Married people who are thinking about buying a home this year for the first time could save up to €4,100 in mortgage interest repayments.
First-time buyers are being offered mortgage interest relief of 25pc instead of 15pc, which could save individuals €2,050 and a married couple €4,100.
The details of the incentives were revealed in the Finance Bill but had been introduced in Budget 2012 by Minister for Finance Michael Noonan.
However, this offer is only in place for 2012 in an attempt to kick-start buying this year.
Mortgage tax relief is essentially a payment made by Revenue to the lenders for those who qualify. The money is then subtracted from the monthly mortgage repayment the householder is due to make.
And there are provisions for those who bought at the height of the property bubble but are now in negative equity, struggling with their repayments.
However, those who got mortgages in 2004 will benefit the least from the new provisions -- individuals will see a maximum gain of €450 per year and couples will benefit by €900.
Technically, first-time buyers can only be considered as such for seven years.
First-time buyers who took out loans in 2007 will gain most from the changes although they are the ones who paid the most for their properties.
They will benefit by up to €1,000 for singles and €2,000 for couples in 2012 and 2013.
In 2014, the seven-year rule kicks into place and they will be entitled to the increased rate of relief on non-first-time buyer ceilings.
"The group of people who bought at the height of the negative equity boom are being given an opportunity to get their debt down," Minister of State Brian Hayes noted.
But FF's Michael McGrath criticised the bill's remit. "It is untargeted -- there are some very wealthy people who will benefit from this," he said.
"Undoubtedly those who bought in 2004, who have lost their job are in difficulties. But those who bought in 2003 could also be in a difficult position.
"It doesn't target resources for those who are most in need."