Removing tax relief on tracker mortgages
Sir, – Arthur Henry (June 27th) is opposed to ending mortgage interest relief on tracker mortgages, “especially to ease the burden on banks, whose staggering incompetence got us into this mess in the first place”.
I wholeheartedly agree that the banks’ incompetence was a large part of the original problem. However, another major contributing factor was the government’s facilitation of the property bubble. Prices can effectively never become inflated beyond what buyers can pay, so all of the factors that enabled buyers to pay more for property are collectively to blame for the bubble. That includes lax lending standards, low interest rates and tax concessions.
To the best of my knowledge, mortgage interest relief on the primary place of residence is unique to Ireland. There is no objective reason why this concession should exist at all, as it means taxpayers are helping individual home buyers to pay their mortgages, or to put it another way, subsidising the purchase of privately-held assets.
The other point that Mr Henry seems to have missed is that “easing the burden on the banks” now means exactly the same thing as “easing the burden on taxpayers”. – Yours, etc,
Marcus Beach, Queensland,