***UPDATE – Mortgage Interest Tax Credit has been extended to cover 2026 & 2027 mortgage rate increases. You can now claim credit from 2023-2027 (or about €1,250 per year).
If you followed the recent highlights of the 2025 Budget, homeowners discovered that Mortgage Interest Relief (MIR) has been extended for another year. The Irish Government’s decision to extend this has drawn significant criticism, especially regarding its effectiveness and how it aligns with broader housing policies. Read HERE.
The MIR extension, costing €125 million annually, mainly benefits homeowners by refunding a portion of the interest they pay on mortgage loans, up to a maximum of €1,250 per year.
However, many experts argue that this policy helps wealthier individuals rather than those most in need of housing support.
Why MIR Extension Sparks Controversy
In the original budget announcement for 2024, MIR was intended to be a one-off measure, but it has since been extended. This decision raises questions about the government’s approach to tackling the ongoing housing crisis.
The Department of Finance had previously advised against extending the relief, citing that it could contribute to inflation and does not effectively target those under financial strain. Despite these concerns, the measure was included once again, sparking debate about whether public funds are being used efficiently.
Similar criticisms have been raised against other government housing schemes, such as the Help to Buy (HTB) initiative and the Housing Assistance Payment (HAP), which, while well-intentioned, have benefited financially secure individuals more than those struggling to afford a home. Given this, there is growing concern that housing policy decisions are being made without sufficient evidence or long-term planning.
What This Means for Modular, Log Cabin and Tiny Home Buyers.
For those interested in modular and tiny homes, this continued focus on traditional mortgage relief may feel like alternative housing solutions are being ignored. However, it’s essential to understand how policies like MIR and broader housing challenges affect your ability to buy or build a modular or tiny home in Ireland.
1. Affordability and Financing Options
Modular and tiny homes are often marketed as cheaper options to traditional housing – but that may not truly be the case, as recent reports on modular homes in Ireland have shown. Also, with rising interest rates and limited access to affordable land, potential buyers may still face difficulties getting mortgages or loans.
Although the MIR extension provides some relief for homeowners, it doesn’t really address the main issue of making modular homes affordable.
2. Sustainability & Long-Term Savings
The main advantage of modular and tiny homes is their construction speed. Sustainability and energy efficiency are a close second and can result in long-term savings.
In a housing market where energy costs are a significant concern, opting for a modular or tiny home could offer benefits that traditional housing, even with MIR, cannot match.
3. Regulatory Issues
Aspiring modular and tiny home buyers should also consider the local Irish regulation. Planning permissions and guidelines may differ for non-traditional housing options, especially in urban areas.
It’s crucial to consult with local authorities and modular home builders to ensure that your modular or tiny home plans are feasible.
4. Housing Scarcity
While modular homes can be built more quickly than traditional homes, the scarcity of available land remains a challenge, especially in densely populated areas like Dublin. Buyers should be prepared to deal with this scarcity, and higher land prices and more competition.
Final Thoughts
The decision to extend Mortgage Interest Relief in Budget 2025 continues to raise questions about the effectiveness of Ireland’s housing policies. While traditional homeowners may benefit from the extension, those looking into alternative housing solutions like modular and tiny homes must carefully consider how these policies—and broader market conditions—impact their plans.
Understanding the boring details of housing finance and regulations will be essential.
Modular and tiny homes offer numerous advantages, but buyers should stay informed about how Ireland’s housing market and government policies, like MIR, affect their ability to purchase or build a home. As the housing crisis continues, these alternative solutions may become increasingly popular, but they will not be without challenges.
