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Investigates Investigates Money Diaries The Journal TV Climate Crisis Cost of Living Road Safety Newsletters Temperature Check Inside the Newsroom The Journal Investigates Daft.ie Property Allianz Home The 42 Sport TG4 Entertainment The Explainer A deep dive into one big news story Sport meets news, current affairs, society & pop culture have your say Or create a free account to join the discussion Advertisement More Stories Alamy Stock Photo Dumb move on mortgage interest relief shows how hard it is to stop ‘temporary’ spending The measure was meant to be a ‘one off’ in 2023. It remains on the books. 7.31am, 26 Oct 2025 Share options Paul O'Donoghue HOW LONG SHOULD a one-year measure last for? It might seem like that question answers itself. But it has actually become one of the more tricky questions in Irish politics. Because the government has made an unfortunate habit of extending measures which were only meant to be one-offs – essentially, locking itself into spending more money than intended. The perfect example of this came in the form of mortgage interest relief (MIR). Announced as a one-time measure in 2023, it has just been extended as part of the latest Budget. Initially, it was just meant to apply to interest paid in the calendar year 2023. Now, it will run until the end of 2026. That’s despite the policy being universally derided. The technical descriptions employed by economists normally amount to something like a dumb waste of money. Or, more simply, ‘a terrible idea’. So, why is this all so bad? It’s worth considering first what MIR is, and what’s wrong with it. The measure was announced in 2023, as part of Budget 2024. Essentially, it gave tax relief worth up to €1,250 a year for certain mortgage holders. Namely, those who experienced an increase in their mortgage payments between 2022 and 2023. It was introduced in response to a sharp rise in mortgage rates between late 2022 and 2023. The annual cost was estimated at €125 million per year. Advertisement The actual spend has been lower than that – the cost to the state was estimated at €35 million in 2023. This is because many homeowners entitled to the scheme did not apply for it. But it means the government is still spending tens of millions per year on a scheme which is widely regarded as poor. Why does MIR have this bad reputation? A few reasons: It’s a support paid to homeowners. By definition, these are people who tend to be financially well off Many of those who qualified for MIR were tracker mortgage customers. These homeowners enjoyed rock-bottom rates for years, while others paid higher rates There is essentially no evidence of how effective it is – does it help people who are actually financially struggling, or is it just an extra payment to well off households? And perhaps the biggest problem is that in an Irish context once you introduce a financial support scheme, it becomes incredibly hard to get rid of it. All of this was pointed out to the government *before* it introduced MIR. It was summed up well by economics lecturer Ciarán Casey in this publication: “The measure itself creates an interest group which will fight to retain it.” But, under pressure from Sinn Féin’s loud calls for the move and with a general election looming, the government pushed ahead with it anyway. And so the predictions came to pass – MIR has proved to be an incredibly sticky policy. What was meant to be one year turned into four. We’re now spending tens of millions annually on a policy which we have no idea is working or not. This is something which the government regularly does – introduces a measure which is meant to be ‘temporary’, which then either hangs around for years, or becomes permanent. Unfortunately, it’s also often the case that there is little evidence whether taxpayers get value for their money. And little interest that those in government circles care. Perhaps the premier example of recent times is the reduced VAT rate for the hospitality sector. Originally brought in as a way to stimulate economic activity during the financial crisis, it was originally only meant to operate until the end of 2013. We all know how that one turned out. Fast forward to last month, and the government has just extended the hospitality VAT rate cut permanently. We’re now foregoing almost €700 million in tax a year on the measure. And what are taxpayers getting in return? Vague promises that it will boost restaurant ‘competitiveness’. That it will ‘safeguard jobs’. As pointed out by many people, there is absolutely no data showing if the measure is 1) actually needed 2) will be effective. And yet – the government has happily committed to it. There are plenty of other examples of this bad habit. We also have the Help to Buy (HTB) scheme which gives a tax refund to first-time house buyers. Related Reads Extension of mortgage relief shows Ireland's housing spending increasingly based on vibes Why mortgage interest relief could end up making Ireland's housing market even more dysfunctional Analysis: Sinn Féin's mortgage interest relief proposal is a terrible idea Originally introduced in 2017, it was only meant to run until the end of 2019. It was also meant to only cost about €40 million. That has since expanded to about €200 million per year, and rising. The measure has recently been extended to the end of 2029 – a full decade after it was meant to end. The policy has been picked apart by everyone. The common view is, at best, it’s a waste of money and doesn’t achieve its aim of helping people to buy houses, as a large number of those using the scheme already had enough money to buy themselves. Everyone from economists to consultants to the Oireachtas itself has come to this conclusion. And yet, the government renews the scheme year after year, as it is popular with voters and building industry lobbyists. There are plenty of other examples of the government introducing a ‘temporary’ scheme, which winds up either expanding wildly or becoming permanent. So what is the point of highlighting all this? It’s to show that the government has become increasingly relaxed about committing to long-term spending increases based on very little evidence. This also comes at a time when the state is increasingly relying on corporate tax windfalls. Which, if they ever reduced, would leave Ireland significantly in the red. This is why the likes of the Irish Fiscal Advisory Council and the Central Bank have been tearing their hair out, warning the government again and again to avoid these ‘one off’ policies. There is some evidence that the government is at least half-listening. Finance Minister Paschal Donohoe committed to reducing one-off measures, and didn’t renew energy credits which had been handed out in previous years. But there are still far too many ‘temporary’ schemes which have become permanent, at huge cost to taxpayers. What should happen is a value for money audit on major ‘temporary’ spending measures. Anything where the state is spending tens of millions a year. Of course, reviews are easily ignored, HTB being a perfect example. But perhaps an audit, coupled with a commitment to stick by its findings, could be a move in the right direction. Taxpayers deserve to know if these schemes are actually effective, and if they deserve to continuously be extended. Because taxpayers deserve to know if their money is being spent well. Or, if it’s just being funneled into the pockets of those who don’t need it. Readers like you are keeping these stories free for everyone... A mix of advertising and supporting contributions helps keep paywalls away from valuable information like this article. Over 5,000 readers like you have already stepped up and support us with a monthly payment or a once-off donation. Support The Journal Paul O'Donoghue Viewcomments Send Tip or Correction Embed this post To embed this post, copy the code below on your site Email “Dumb move on mortgage interest relief shows how hard it is to stop ‘temporary’ spending”. Recipient's Email Feedback on “Dumb move on mortgage interest relief shows how hard it is to stop ‘temporary’ spending”. Your Feedback Your Email (optional) Report a Comment Please select the reason for reporting this comment. Please give full details of the problem with the comment... 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