Mortgage interest relief for top rate taxpayers has been falling since 1994, increasing the tax bills and reducing take-home pay. With the latest reduction in the standard tax rate the effective rate of relief in 1998/99 will be half of the 1993/94 rate, hitting the after-tax income of top rate taxpayers.

The relief is now provided as a credit rather than a deduction, moving towards the British system. It looks like it will be only a matter of time and of agreement between the lenders and the Revenue Commissioners before the Mortgage Interest Relief At Source system which is in operation in Britain is introduced here. It is much less complicated but much less beneficial to taxpayers than the Irish system.