Will tracker mortgages be taxed at next budget

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Afterflood

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Hello all,

I was speaking with a friend who works for one of the big 2 banks at weekend and he told me that there is a rumor that the government is planning ot tax tracter mortgages in this years budget.

I think the idea is that since tracker holders are in actuality doing well as regards mortgage payments and are in a way being subsidised by variable rate holders that the government will look for a little additional tax from the tracker holders.

My friend thinks that it will be a 1 or 2% payment on the mortgage payment similar to what they do with life type savings schemes at the minute.

Might be a good way for the government to raise a few bob.

If anyone can confirm I would appreciate.
 
and what happens if ECB raise rates? Wil they reduce the tax then? Sounds unworkable and highley unlikely but thats just my opinion and I dont work in a bank. If you sign up for a variable rate, you know the rate is goiing to be variable,you are not subsidising anyone else,just paying for your own decision in my opinion
 
As a tracker holder, I can't see this happening either.

I appreciate that us with trackers are on the pigs back so to speak, but it would be going against the contract I signed with the bank when I took out my mortgage.

I think legally they couldn't do it. It was a contract I signed between me and the bank, not me and the Gov.
 
5 years too late I'm afraid.

A lot of people apportion some blame for the Irish Housing Bubble with the ECB and the low interest rate policy it adopted but the Government of the day was perfectly within it's rights to apply a levy of 1-2% on all mortgages drawn down in the country. Essentially negating the excessively low ECB rate.

At the time it would have been a very good idea. In reality we had the opposite policy, with Mortgage Interest Relief inflated to ridiculous levels.

Introducing this today on all Tracker mortgages only would not be possible in my opinion. All or nothing I'm afraid. At the most practical level - not all trackers are at the same level. In fact some Fixed rates taken out a couple of years ago may be at a lower rate than some Trackers.
 
A friend of mine who has a tracker was saying they expect to lose their TRS. Was saying they may tinker with it in the budget to try and help people who have being hit by bank rate increases. Again this is all speculation from media. We will have to wait till December to see.
 
It's a ridiculous suggestion IMO.
Yes a tracker is of benefit at the moment.So in that case we should look at all benefits everyone has, and tailor a tax package for each individual :rolleyes:
 
The govt could easily remove TRS from tracker mortgages.
 
The trackers are only unprofitable because our banks destroyed their balance sheets by exploiting ignorant borrowers and the government destroyed its credit rating with a structural tax deficit. Those with trackers are labouring under debts, some of them very large.

There should be tax on people with houses with no mortgages. That would be a tax on assets and wealth rather than a tax on debt.

Of course the grey brigade wouldn't want to have to pay something to the generation they have totally screwed. Better to screw those doing worst and labouring under huge debts, pay cuts and increased taxes a bit more.
 
No point taxing trackers, they are a dying mortgage product that will continue to shrink as people pay them off, move to variables (as a result of moving house etc).

I would expect the Govt would want a more stable and predictable taxable source than tracker mortgages. As mentioned it would be easier to remove TRS.

Maybe they are planning a tax on all mortgage repayments? Surely there are better ways of increasing the tax take.
 
aristotle said:
No point taxing trackers, they are a dying mortgage product that will continue to shrink as people pay them off, move to variables (as a result of moving house etc).

I would expect the Govt would want a more stable and predictable taxable source than tracker mortgages. As mentioned it would be easier to remove TRS.

Maybe they are planning a tax on all mortgage repayments? Surely there are better ways of increasing the tax take.
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But it would only be a short term way of gathering quick money, assuming they actually try to do it.

Personally I would agree with tracker holders losing their TRS - they have not had any of the increases that other SVR mortgage holders have been hit with (and will continue to be hit with) so they could pay some way.
 
Note where the original "rumour" came from. Obviously this has absolutely nothing to do with banks trying to panic people into moving from their trackers to variable rate mortgages. !!!
 
RMCF said:
Personally I would agree with tracker holders losing their TRS - they have not had any of the increases that other SVR mortgage holders have been hit with (and will continue to be hit with) so they could pay some way.
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But trackers and SVR's are different products, that's why they are treated differently :confused: In that case there was no point in borrowers making any lending choices if we're just going to screw everyone anyway.
 
RMCF said:
Personally I would agree with tracker holders losing their TRS - they have not had any of the increases that other SVR mortgage holders have been hit with (and will continue to be hit with) so they could pay some way.
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You cant tax someone more just because they have been lucky. What if their luck changed-loss of job; illness etc-How could you draft the finance bill for a luck clause?
Next someone will suggest that when it comes to capital gains tax you should pay more tax if the asset was paid off with a tracker or lower priced loan as its unfair on those that have the same gain on a similar asset but had to pay a higher rate of interesr on the loan used to acquire it.
Banks conned the Govt before saying they were rich beyond wildest dreams and now perhaps they are conning them on the price of wholesale money and mortgage losses. Govt should be drafting legislation to ensure banks cannot penalise those on SVR's.
 
I have a tracker myself and I dont want to see anymore taxes, believe me.

However I do think the government is genuinely looking at taxing tracker mortgages.

People wouldnt be being taxed becuase they are lucky but becuase they choose to avail of a tracker mortgage like peope are taxed when they choose to avail of a pint, or petrol or any other taxed item.

People could switch to another type mortgage if they like and thereby avoid the tax.

We will have to wait and see i guess.
 
However I do think the government is genuinely looking at taxing tracker mortgages.
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How could they assess this?

People wouldnt be being taxed becuase they are lucky but becuase they choose to avail of a tracker mortgage like peope are taxed when they choose to avail of a pint, or petrol or any other taxed item.
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Different things-buying a pint or petrol attracts VAT or Excise. What tax type would apply to a tracker mortgage?

People could switch to another type mortgage if they like and thereby avoid the tax.
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Its not a simple matter to do this and just like banks, the Govt could not encourage someone to do something that may not be in there best financial interests.

If you can post back with an example of another country that has successfully brought in a tax similar to this I will eat my mouse!
 
I suppose on the basis that all taxes have to equitable the Government will have to tax fixed rate mortgage holders when interest rates increase and they begin to appear to have made a shroud decision.

Taxing trackers sounds daft and ridiculous. Most people who borrowed in the last few years are struggling, tracker or no tracker. The government would simply be pushing more people towards defaulting.
 
Ridiculous idea. I didn't borrow over the odds, I borrowed just about twice my salary and luckily enough I will have a tracker in January next year. Why should I be taxed for borrowing wisely and not above my head. Bail out bankers who gambled incessantly yet tax those who borrowed wisely? What a load of...
 
Afterflood said:
I think the idea is that since tracker holders are in actuality doing well as regards mortgage payments and are in a way being subsidised by variable rate holders that the government will look for a little additional tax from the tracker holders.

My friend thinks that it will be a 1 or 2% payment on the mortgage payment similar to what they do with life type savings schemes at the minute.

Might be a good way for the government to raise a few bob.
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I can see some logic in this i.e. the neutral going rate for borrowings could be ECB + 2% and anyone doing better than this would pay something akin to Benefit in Kind taxation.

By the same token anyone with savings earning above say ECB should pay marginal tax on the excess (less any dirt already payable).

I wouldn't agree with either, I doubt they would be workable in any case.
 
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