More than 225,500 homeowners will see a rise in their mortgages if they qualify for tax relief

DUBLIN: The Irish Mortgage Holders Organisation said yesterday that more than 225,500 homeowners will see a jump in their mortgages if they qualify for tax relief. The average annual relief on a €250,000 mortgage for a couple is around €1,857.  This means that some people can see their mortgage payments rising to €150 per month or more.

The mortgage interest relief was initially planned to be abolished in 2017, but was later extended to the end of 2020.

Based on current data, the Department of Finance has confirmed that there are 225,532 mortgage accounts that will no longer receive relief from the start of the New Year. But it was always being phased out.

The lender pays the tax relief by deducting the monthly mortgage payment or by crediting it to a mortgage funding account.

“The relief has expired for mortgages taken out prior to 2004 and ceased for new borrowings from January 2013. In 2019, 50% of the interest on a relevant loan qualified for relief while for 2020 the amount was tapered to 25% and will cease from 1 January in 2021, as legislated for in Finance Act 2017,” a spokesman for the Department said.

Meanwhile, David Hall, CEO of the Irish Mortgage Holders Organisation said he hoped this was an oversight given thousands of people had lost their jobs during the pandemic. He added that there should be a reminder to the people who make use of it.

Mr. Hall said unemployment and uncertainties about the future would quickly lead people to mortgage arrears and pay higher repayments.

The decision to discontinue the Mortgage Interest Relief is based on the view that relief for the purchase price of the property becomes the effective price, according to Finance department.