families with mortgage difficulties

Brendan Burgess

Brendan Burgess

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Update from PapercutI have been on to the Revenue Helpline 1800314414, & was informed that this definitely only applies to people who find themselves in negative equity.

If you took out your mortgage in 2005, then your mortgage interest relief will stop after seven years, unless you find yourself in negative equity, in which case you can apply for it to be extended.

They are not sure of what the exact process will be as yet, but obviously each case will be assessed on an individual basis.



Mortgage Interest Relief
Qualifying loans taken out before 1 July 2011 will continue to get relief for 7 years. Transitional measures will be provided for qualifying loans taken out between 1 July 2011 and end 2013.

Those whose entitlement to relief would, in the absence of this change, expire in 2010 or after, will continue to qualify for relief at the applicable rate up until end 2017.

Abolition of the relief entirely by end 2017.

Mortgage Interest subsidy to be reviewed in new year


 
How can they police negative equity claims. Surely the value of a house is impossible to gauge in a dead market.
 
Can someone clarify the mortgage interest rate thing a bit more?

Those whose entitlement to relief would, in the absence of this change, expire in 2010 or after, will continue to qualify for relief at the applicable rate up until end 2017.

Does this mean that if your mortgage interest rate is due to expire in e.g. 2012, it will now be extended to 2017? Or does it mean that if your 7 years are not yet up, you'll be allowed claim until they are up?
 
roro123 said:
How can they police negative equity claims. Surely the value of a house is impossible to gauge in a dead market.
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Hi roro

It applies to all loans,not just negative equity.

I thought the Minister mentioned negative equity in his speech, but it does not appear in the written version.

Brendan
 
I have the same question as csirl.

If your mortgage trs was due to end in 2011 (7 year rule), is this now extended to 2017?
 
Yes this is confusing me also - when listening to the original speech I took it to mean that anyone presently getting mortgage interest relief would have it extended to 2017, but then in the analysis programmes it was mentioned that anyone who had taken out a mortgage in the past five years would have the relief extended to 2017, which confused me more. Did they mean if year 1 was 2005 that they would have it extended, or did they mean if you took your mortgage out in 2004 it would be extended. Where did the five year cut-off come into things to begin with?

But Brendan's post above seems to imply what I originally thought/heard:
''Those whose entitlement to relief would, in the absence of this change, expire in 2010 or after, will continue to qualify for relief at the applicable rate up until end 2017.''

Or does it :confused:
 
That is not my analysis. That is the extract from the Budget Summary, so I imagine that the analysis programmes got it wrong.
 
"Those whose entitlement to relief would, in the absence of this change, expire in 2010 or after, will continue to qualify for relief at the applicable rate up until the end of 2017."

The "or after" would seem to indicate to me that ANYONE currently getting interest relief will now to get it until 2017 regardless of what year there are currently in at the moment?
 
Here is a the quote from the RTE website:
"In the Supplementary Budget I refocused mortgage interest relief on those who bought their homes at the peak of the market. As a support to homeowners who now find themselves in negative equity I am providing that where entitlement to the relief would expire in 2010 or after, they will now continue to receive it up to the end of 2017."

I find this hard to believe. This would mean someone who took out a mortgage in 2003 and either remortgaged along the way or only paid interest for the last 7 years would now be getting extra tax relief, i.e. rewarding mistakes. I very much doubt that anyone who bought a house 7 years ago and made normal payments would now find themselves in negative equity.
 
Chris - you're kidding! All houses bought in our estate have dropped in price by more than 1/3. For example, somebody who purchased a standard 3-bed semi in 2006 for €300,000 and got what was offered (i.e. 100% mortgage) is now sitting in a house currently selling for €159,000. I'm sure this is very typical of a huge number of houses throughout Celtic Tiger land.
 
roro123 said:
How can they police negative equity claims. Surely the value of a house is impossible to gauge in a dead market.
Click to expand...

I always believed that something is worth what somebody is willing to pay! The market is partly dead because people are not selling or not willing to drop prices enough!
 
csirl said:
Can someone clarify the mortgage interest rate thing a bit more?

Those whose entitlement to relief would, in the absence of this change, expire in 2010 or after, will continue to qualify for relief at the applicable rate up until end 2017.

Does this mean that if your mortgage interest rate is due to expire in e.g. 2012, it will now be extended to 2017? Or does it mean that if your 7 years are not yet up, you'll be allowed claim until they are up?
Click to expand...

Could somebody clarify the above, please?
 
I just don't see the logic in this. I'm not complaining, but what does negative equity have to do with anything?

The only time negative equity is an issue is if you're planning to move house, in which case you'd lose the entitlement to the relief anyway (don't you?).

I can see that the relief is extended in light of the fact that interest rates will go up next year, I think this pretty much confirms it. It also seems to confirm that the we'll expect some tough times with interest over the next few years. I just don't get why it's being hung on negative equity.
 
Latrade said:
I just don't see the logic in this. I'm not complaining, but what does negative equity have to do with anything?

The only time negative equity is an issue is if you're planning to move house, in which case you'd lose the entitlement to the relief anyway (don't you?).

I can see that the relief is extended in light of the fact that interest rates will go up next year, I think this pretty much confirms it. It also seems to confirm that the we'll expect some tough times with interest over the next few years. I just don't get why it's being hung on negative equity.
Click to expand...

You're correct.

Negative equity is only an issue if you move from being a homeowner to a non-homeowner.

If our aim is not to throw people out on the street then it's their ability to service their debt we need to look at.

I suggested before here that reducing total debt by incentivising people to trade down would be of universal benefit. The thread just petered out because people were not getting their head round the idea that it's total debt versus income is the problem for people as opposed to negative equity.
 
OK so we took ou our mortgage in 2005, does that mean that our trs is extended to 2017?
 
I have been on to the Revenue Helpline 1800314414, & was informed that this definitely only applies to people who find themselves in negative equity.

If you took out your mortgage in 2005, then your mortgage interest relief will stop after seven years, unless you find yourself in negative equity, in which case you can apply for it to be extended.

They are not sure of what the exact process will be as yet, but obviously each case will be assessed on an individual basis.
 
Well neighbours have sold their houses at less than what was paid for them so does that count? I think our house is worth about 10-15k less than what our mortgage is for (we took out a 92% mortgage). But our tax relief isn't due to end until 2011 meaning we might have regained the value currently lost. The minister said for those who find themselves now in negative equity so will be interested to see the details. This is kind of like the "where's my nama?" people have been searching for.
 
I wonder if its worth remorgaging the house, putting the money on deposit and retaining our TRS? Probably
 
sandrat said:
Well neighbours have sold their houses at less than what was paid for them so does that count? I think our house is worth about 10-15k less than what our mortgage is for (we took out a 92% mortgage). But our tax relief isn't due to end until 2011 meaning we might have regained the value currently lost. The minister said for those who find themselves now in negative equity so will be interested to see the details. This is kind of like the "where's my nama?" people have been searching for.
Click to expand...

I am completely confused by this. Im an owner-occupier and would definitely be in negative equity but as I live there does that matter? Took the mortgage out in 2006.
 
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