7,000 struggling mortgage holders lose interest relief after failing to keep up payments last year

Nearly 7,000 mortgage holders lost their mortgage interest relief after failing to make payments on their homes last year.

The struggling home owners would have to make three consecutive payments in order to qualify for the tax relief again.

The Revenue Commissioner’s policy of cancelling mortgage interest relief for customers struggling to make their payments has been criticised by Fianna Fáil’s finance spokesperson Micheal McGrath.

Deputy McGrath likened the cutting of the relief to the most vulnerable mortgage holders, as similar to switching off a patient’s life support.

“It is like turning off the life support apparatus for a patient in an intensive care unit,” he said.

Figures released to Mr McGrath, showed that 7,000 people had their interest relief cut after failing to make mortgage repayments for six months.

“I am informed by Revenue that some 6,982 accounts have been ceased for mortgage interest relief in 2012 due to non-payment,” Finance Minister Micheal Noonan told Mr McGrath in response to a parliamentary question.

In the response, Mr Noonan said that in order to have the relief restored the mortgage holder has to make three consecutive full payments to their lending institution.

Mr McGrath described this as too high a barrier for struggling mortgage holders to meet.

“Three consecutive payments is too onerous. Where people are making an effort and working with the banks they should be given every help available as these are people in real danger of losing their homes,” he said.

The are 270,000 people eligible for mortgage interest relief in Ireland. The tax relief is available to borrowers who took out a home loan between 2004 and 2012. Since Jan 1, 2012, the rate of mortgage interest relief for first-time buyers living in their homes is 30% until 2017.

Since its introduction the mortgage interest relief has been problematic with banks failing to pass on the relief to customers due to a technical glitch that meant they could only pass on a saving of 25%.