DUBLIN (Reuters) – Ireland is considering reintroducing tax relief on mortgage interest payments but any scheme is likely to be limited to borrowers hit hardest by rising interest rates, Prime Minister Leo Varadkar said on Friday.
The government ended a broader scheme in 2020 that had offered tax relief to borrowers who had taken out mortgages in the lead-up to and aftermath of Ireland’s 2008 banking crash.
Ministers have come under pressure from opposition politicians to reopen the scheme with each European Central Bank rate hike, most recently on Thursday when policymakers pushed the euro zone’s key interest rate to a record high of 4%.
“Anything that would be broad-based would be prohibitively expensive so I think if we are going to do something to help people on mortgage interest, it really should focus on those who are paying the highest rates and those who might be at risk of losing their homes,” Varadkar told reporters.
Varadkar said the detail has not been worked out yet, but the relevant ministers were working on the matter ahead of the 2024 budget, due to be published on Oct. 10.
Data on Friday from Ireland’s central bank showed that the total stock of mortgages in arrears fell 4% quarter-on-quarter in the three months to June. However, that included an increase in those unable to pay for between 90 days and one year.
Central Bank of Ireland Deputy Governor Derville Rowland said that while the continued decline was welcome, the regulator remained “vigilant for emerging issues in the current economic environment.”
(Reporting by Padraic Halpin; Editing by Sachin Ravikumar)