Re-introduction of Mortgage Interest Relief: Motion [Private Members]
Dail Éireann — 2023-04-25
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Paschal Donohoe (FG), Dublin Central

The National Development Plan 2021 – 2030 (NDP) published in October 2021 provides a detailed and positive vision for Ireland over the next 10 years, and delivers total public investment of €165 billion over the period 2021-2030. The NDP also set out the range of actions that are being taken to strengthen delivery, maximise value for money, and ensure to the greatest extent possible that projects are delivered on time, on budget and with the benefits targeted at the outset. In 2023, over €12 billion will be made available from the Exchequer for investment in public capital projects, which will provide more schools, homes, hospitals and other pieces of vital infrastructure.
Gross current expenditure by Departments was €77.8 billion in 2022, representing a year-on-year increase of over €0.2 billion or 0.3% above the same period in 2021, while gross capital expenditure by Departments was €10.9 billion, inclusive of an estimated capital carryover spend of just under €0.8 billion into 2022. This represented a year-on-year increase in capital investment of almost €1 billion or 9.9%.
In the interest of safeguarding public projects that are already under construction and to mitigate the risks of significant losses being sustained by contractors, in May 2022 the then Minister for Public Expenditure and Reform announced details of the “Inflation Co-operation Framework" (the Framework) for those parties engaged under a public works contract.
The Framework facilitates both parties to engage with one another for the purpose of addressing the impacts of the most recent onset of exceptional inflation and supply chain disruption and operates on an ex gratia basis. Reports from Departments suggest that agreements have been reached on a wide range of projects and, where formal agreement has not yet been reached, parties continue to engage with works progressing.
Costs relating to implementation of the Framework are to be met from within existing capital expenditure ceilings. The levels of capital spending set out in the NDP, at close to 5% of GNI*, are already among the highest in the EU and are close to the limit of the overall capability to deliver in the coming decade. The ceilings detailed in the NDP have to be cognisant of the overall capability of the construction sector to deliver on the NDP and of the appropriate share of National Income being devoted to infrastructure. Similar to any process of Vote management, it will be up to sectors and Accounting Officers to assess whether existing timelines for the implementation of key projects will need to be adjusted on account of the Framework implementation or if there will be a need for prioritisation within their existing five year departmental ceilings.
The use of the Framework is voluntary, but participation by the parties is strongly encouraged. It represents a pragmatic and proportionate response to the current challenges caused by inflation that are not within either party’s control.
These significant payment increases really hit people hard but are absolutely crucifying for those whose mortgages are held by vulture funds. Approximately 65,000 people, many in families, are paying mortgage interest at a rate of 7% or more. How helpless must those people feel? How trapped must they feel? This proposal, perhaps with a relief for just one month, would be a small window of hope. Many homeowners paid inflated prices for their homes in the first place, especially those who bought recently. Loading significant mortgage repayment increases on their shoulders at this time puts them under extreme pressure. While a significant proportion have fixed interest rates, the proposed measure is not for those people; it is for those hit by increasing interest rates.
In my constituency, Sligo–Leitrim, house prices have increased by 18% since 2021. They have increased by 14% in Donegal and a similar amount in Roscommon. Those who have taken out mortgages recently have paid a significant amount of money for their properties, and they too are under severe pressure because their incomes have not kept pace with the rate of inflation – not even close.
I have listened to various opinions on this. The Government seems to suggest enough is being done and that we should continue as we are doing; however, most people recognise that this is not sufficient. Others have expressed reservations to the effect that the taxation step is regressive. If the scheme were the old mortgage interest relief scheme, I would agree, but the proposal is capped and temporary. Yes, there would be a transfer of some economic benefit to homeowners but it would be small and designed to help those most at risk of not being able to continue paying their mortgages. While the Government's counter-motion states it will not do anything regarding this matter, I urge the Minister of State to re-examine it. Even if he does not agree with this specific proposal, he should think, now and not at the next budget, because the increases just keep coming for people, about how we can help those who are struggling with increased mortgage repayments.

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Retrieved: 2026-08-14T04:51:48+00:00
Sitting date: 2023-04-25