Speaking on the Second Stage of the Finance Bill 2012, Senator Aideen Hayden called on the Minister today to give serious consideration to the position of those who are in what she called a "rent to rent" situation. This group includes those who bought during the boom but for various reasons have been forced to move, either for employment reasons, because they bought small apartments initially and now require a family home or in some cases both.

"We now have a ludicrous situation where such a person pays tax on any rental income received that exceeds the allowable deductions, also pays the NPPR, is no longer entitled to mortgage interest relief and depending on their lending institution loses the benefit of a tracker mortgage. Moreover this family also pays rent but gets little or no relief on rent paid.

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"I believe that the matter could be resolved by changing the mortgage interest relief rules and the definition of principle private residence. The pressure should be brought to bear on those banks within state control to ensure that they do not change the terms of mortgages on what are in reality principle homes.

"Banks should not be allowed to use any excuse possible to get borrowers off tracker mortgages. People trapped in "rent to rent" situations cannot move on until we deal with the wider mortgage crisis and we must recognise this.

"I welcome the measures in the Bill to help those who purchased their homes during the 2004 to 2008 period by giving them greater mortgage interest tax relief. However I would have liked to have seen the measure more targeted and to have included not just those who had bought their first homes in this period. Many people upgraded from apartments to moderate family homes by necessity during these years and are indeed worst hit."

(MM/GK)