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Mortgage holders told to ensure new interest relief is applied

The Department of Finance says lenders have been told to apply mortgage interest relief with effect from January 1st.

Although Michael Noonan announced new mortgage interest relief rates last month, with effect from January 1, they won't take legal effect until April.
Although Michael Noonan announced new mortgage interest relief rates last month, with effect from January 1, they won't take legal effect until April.
Image: Eamonn Farrell/Photocall Ireland

Updated, 19.11

MORTGAGE HOLDERS who bought their properties at the height of the property boom have been advised to ensure that their lender is passing on the benefit of a cut in mortgage interest rates.

The Budget introduced a new 30 per cent rate of mortgage interest relief for first-time buyers who took out mortgages between 2004 and 2008, in a bid to help families with the biggest mortgages keep on top of their monthly repayments.

The advice comes after some mortgage holders said their lenders were delaying the introduction of the new 30 per cent rate, saying they had not been informed of the new rules by the Revenue Commissioners.

In a statement to this afternoon, the Revenue Commissioners said all lenders had notified about the new regime on December 6 – the day it was announced.

It added, though, that some lenders may require extra time in order to update their IT systems and provide for the new 30 per cent rate, which had not existed previously.

A Department of Finance spokesman said all borrowers, whose lenders delay introducing the new scheme, should ensure that the relief is applied retrospectively when it does eventually kick in.

Although the new relief is not likely to take legal effect until April, the Department underlined that the scheme was intended to take effect from January 1 and that borrowers should be aware of this.

The new system will not be adopted into law until April because it is contained in the the Finance Bill, which is not due for publication until early February.

This is unlike the Budget’s financial resolutions – which are voted on by TDs on the night the Budget is presented – and the Social Welfare Bill, which changes social welfare provisions and is adopted before the Christmas recess each year.

The Oireachtas is not required to formally pass the Finance Bill until four months after the Budget is delivered – meaning it may not be passed until early April, after which President Higgins may have up to a week to sign it into law.

Last year’s Finance Bill was rushed through the Oireachtas by the end of January, in order to allow the Dáil be dissolved and an early general election to be held.

A PDF booklet explaining the changes to mortgage interest relief under the Budget can be found on the Department of Finance website.

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Gavan Reilly

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