Minister for Finance Michael Noonan has backed the Revenue Commissioners’ move to withdraw mortgage interest relief for homeowners who are behind on their repayments for six months are more.
Commenting on the matter, the Minister said the clampdown was needed to “protect the exchequer.”
He admitted, however, that withdrawal of the relief would have to be dealt with on a case-by-case basis. Mortgage interest relief can be worth as much as €4,000 a year for a couple.
Mr Noonan’s spokesperson insisted Revenue was working in the best interest of the taxpayer.
“If a repayment on a mortgage is not being made this means that interest is not being paid so relief cannot be applied.
“Where cumulative mortgage arrears existed for over 18 months, there was and continues to be a requirement on lenders to notify Revenue so a determination can be made as to continued eligibility, or otherwise, on a case-by-case basis.
“Lenders are required to report cases where payments have not been made for a six-month period to allow Revenue determine continued eligibility for the relief on an individual basis. In the event of the resumption of payment, the relief can be restored following three consecutive payments.”
Revenue said that where payments have failed to be made for six months, relief would cease.
About 350,000 households in the country are in receipt of tax relief, which goes to the mortgage lender and is then deducted from payments by borrowers.
Fianna Fáil’s Michael McGrath told The Irish Examiner that people in the resolution process should still be allowed claim relief.