The return of mortgage interest relief is a ‘terrible idea’ that uses taxpayer money to subsidise the wealthy, according to a financial expert.
It comes after the Housing Minister Darragh O’Brien told the Dáil the reintroduction of the measure must be considered in the upcoming budget.
Eight European Central Bank (ECB) interest rate hikes in the past year have increased the pressure on the more than 700,000 mortgage holders in Ireland.
In recent months, Sinn Féin has been calling for ‘targeted and time-bound’ interest relief for those struggling to pay – and Minister O’Brien is now suggesting it may return in some form.
On Newstalk Breakfast this morning, AskAboutMoney founder Brendan Burgess said reintroducing it would be a “terrible idea”.
“Despite the rise in mortgage rates recently, the vast majority of people who have mortgages can easily afford their mortgage repayments and therefore, they don’t need a subsidy from the taxpayer,” he said.
“Homeowners are, generally speaking, wealthier.
“Like, if you can afford to get a deposit together to buy and house and take out a mortgage, you’re better off than people who are renting – we should not be subsidising the wealthier.
“Even with the increase in the interest rates recently, the mortgage repayments on a house are an awful lot lower than what renters are paying.”
Mortgage Interest Relief
Mortgage Interest Relief offers mortgage holders tax relief based on the level of mortgage interest payments they made in a given year.
It was a feature of the Irish tax system for many years; however, it was phased out over the last decade, formally ending in early 2021.
Mr Burgess said Sinn Féin is proposing a tax relief of 30% of the increased interest over the past year – a move that could hand around €1,500 to mortgage holders.
He noted that people on tracker mortgagees that have been hardest hit by interest rate hikes were paying the lowest interest possible for the previous decade.
“[Sinn Féin] are focusing on tracker mortgages,” he said.
“I mean people on trackers have been paying almost 0%.
“They have almost been getting free money for the last ten years and, now that they’re being asked to pay market levels of interest, Sinn Féin wants to give them €1,500 each – it’s crazy.”
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