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Saturday 30 September 2023 Dublin: 15°C
# bank of mum and dad
People split on mortgage lending rules but strongly opposed to limits on inheritance from parents
An overwhelming majority do not favour limits on the money people can receive from parents.

IRISH PEOPLE ARE split down the middle on Central Bank mortgage rules that limit the size of mortgages given to people buying a home. 

Polling carried out by Ireland Thinks on behalf of The Journal’s The Good Information Project shows differing views on the mortgage rules but there is clear agreement that there should be no limits on the money prospective homeowners receive from parents to buy a home. 

The lending rules were introduced to promote stability after the housing crash and banking crisis and are reviewed every year. 

There are exceptions to the rules, but in general they restrict people or couples to borrowing 3.5 times their income. The rules also dictate that first-time-buyers need to have a minimum deposit of 10% to get a mortgage while subsequent buyers need 20%. 

In the Dáil this week, Tánaiste Leo Varadkar said that the annual review of the rules needs to be carried out as soon as possible

According to the polling, people overall are split down the middle on whether they agree with the rules.

Renters of those living with parents are however more likely to be opposed to the rules. 

The results show that 47% of people agree with the rules and 47% do not, 6% answered that they don’t know. 

Among people who live rent-free with parents or friends, 64% do not support the rules, with a majority who rent privately (55%) also feeling the same. 

Among people who already own a home and have a mortgage, 55% support the rules while 40% oppose them. 

As the mortgage rules come under an increasing spotlight due to spiralling house prices and prospective homeowners facing competition from investment institutions, the Central Bank’s Director of Financial Stability wrote in The Journal last week that some form of mortgage measures would be a “permanent feature” because they “reduce the risk of another credit-fuelled house price boom”.

But while opinions on the mortgage rules may differ, the polling found that an overwhelming majority of people do not favour limits on what people can receive from their parents to buy a home.  

Asked whether there should be a limit, 82% were opposed while just 13% were in favour. The figures were stable across a range of age groups and financial circumstances. 

Capital Acquisitions Tax is a tax on gifts and inheritances. 

Under current revenue rules, a child is entitled to a lifetime tax-free threshold of €335,000 in respect of gifts and inheritances taken from his or her parents.

This work is co-funded by Journal Media and a grant programme from the European Parliament. Any opinions or conclusions expressed in this work is the author’s own. The European Parliament has no involvement in nor responsibility for the editorial content published by the project. For more information, see here.

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