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Written Answers - Tax Reliefs

Thursday, 9 February 2012

Dáil Éireann Debate
Vol. 755 No. 1

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 55.  Deputy Michael McGrath Information on Michael McGrath Zoom on Michael McGrath  asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan  the arrangements in place between Revenue and mortgage lenders regarding the implementation of the increased mort[126]gage interest relief to first time buyers who bought between 2004 and 2008; and if he will make a statement on the matter. [7427/12]

 61.  Deputy Michael McGrath Information on Michael McGrath Zoom on Michael McGrath  asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan  when residential mortgage holders entitled to benefit from the increase in the rate of tax relief at source announced in budget 2012 will receive the additional payment due; and if he will make a statement on the matter. [7448/12]

 66.  Deputy Michael McCarthy Information on Michael McCarthy Zoom on Michael McCarthy  asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan  the total number of mortgage holders to whom the increased rate of mortgage interest relief has been passed since it came into effect on 1 January; the banks that have passed on the relief; and if he will make a statement on the matter. [7506/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I propose to take Questions Nos. 55, 61 and 66 together.

As I announced in the Budget, the proposed new 30% rate of tax relief in respect of interest paid on qualifying home loans for first time buyers who took out their first qualifying home loan in the period between 2004 and 2008 (both dates inclusive) comes into effect as regards the 2012 tax year and subsequent tax years. The necessary legislation is included in the Finance Bill which I published yesterday.

I should point out that mortgage interest tax relief, including the proposed new 30% rate of relief, in respect of interest paid on qualifying home loans is given by qualifying lending agencies, including local authorities, through the tax relief at source (TRS) system. This requires the various lending agencies to make the adjustments in their computer systems.

I am advised by the Revenue Commissioners that, in advance of the legislation, they have been in contact with all qualifying lenders to ensure that the necessary software changes to the lenders’ tax relief at source (TRS) systems are made to cater for the new 30% rate of tax relief and to ensure that the relief can be passed on to borrowers by qualifying lenders without undue delay. All lenders have been requested to confirm when they will be in a position to make the necessary software changes to grant the new 30% rate, however, the speed with which the software changes can be developed and implemented by lenders may vary from lender to lender. Revenue is currently engaging with all of the lenders in arranging to have the new rate tested and implemented as soon as possible.

As an interim relieving measure Revenue has applied a 25% rate that had previously been tested with lenders to the 189,000 eligible mortgage accounts that will qualify for the 30% rate involving some 270,000 individuals. When the 30% rate is subsequently applied by the lenders in due course the additional relief arising from 1 January will be automatically applied by the lender without the need for any action on the part of the mortgage holder.


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