In a significant move towards supporting mortgage holders and prospective homeowners, Budget 2024 introduced key changes in the housing and mortgage sectors. These changes aim to alleviate financial burdens on mortgage holders, incentivise landlords, and make homeownership more accessible for first time buyers.

This article explains the specific reforms and reliefs introduced and provide an understanding about how they can benefit you.

In response to rising interest rates, Budget 2024 introduced one-time mortgage interest tax relief. The relief, set at 20%, offsets the increase in interest paid in 2022 compared to 2023. To qualify for the mortgage interest relief, the following must apply:

The maximum value of the relief is €1,250 per property and it is estimated that approximately 160,000 mortgage holders will benefit from this measure.

In order to claim the mortgage interest tax relief, the mortgage holder must file a tax return with Revenue. The relief will operate by way of a credit offset against the mortgage holder's income tax liability in 2023. It is anticipated that the relief may be claimed in early 2024.

Budget 2024 introduced the further extension of the Help to Buy (HTB) Scheme until 31 December 2025. Additionally, the HTB was updated to include applicants for the Local Authority Affordable Purchase Scheme, starting from 11 October 2023.

The HTB Scheme has been a significant support to first time buyers and since 2017 when it was introduced, 40,000 people have been able to buy their first home using the relief provided by the Scheme. The HTB was initially valid until the end of 2024, so this extension is welcome for prospective first time buyers who are at the early stages of buying their first home as they will have more time to get to the stage where they can apply for the tax refund.

A new tax relief, tailored for small landlords, has been introduced. It will be available against rental income from residential property for tax years 2024 to 2027. Rental income of €3,000 for 2024 will be disregarded for income tax, increased to €4,000 in 2025 and €5,000 in 2026 and 2027.

To avail of this tax relief, landlords must retain their property in the rental market for a four-year period, and if they fail to do so, the relief amount will be clawed back. This measure is designed to ensure sustained availability of rental properties, and promote a stable housing market.

Budget 2024's housing and mortgage sector reforms are aimed at alleviating financial stress for mortgage holders, empowering first time buyers, and encouraging landlords to provide long-term rental solutions. By supporting these key pillars of the housing market, these reforms create a more accessible and sustainable housing landscape for everyone involved.