Mortgage Interest Relief

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Dubsey

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Hi all,

We are in the process of trying to buy a house and ar eager not to miss out on this year's tax relief as it will be reduced as of 2012.

Can anyone tell me what needs to be done in this calendar year to allow us to benefit from the current rates?

Many thanks,

D.
 
You can ring the TRS Helpline on 1890 46 36 26 and they will let you know. I was told that the morgage had to be drawn down in 2011 to qualify. They said that the date of the first payment being in 2011 or 2012 was irrelevant. I'd be interested to hear to they say the same to you. Some people say the response is different depending on who is asked in the office
 
I have also emailed Revenue to enquire about this and I asked the questions specifically about what the deadline refers to i.e. the drawdown date or the first payment date. I will share the response I get when it arrives.
 
Hi guys,

Thanks for the info.

From reading other posts it seems as if some banks will agree to an early repayment so that it goes in 2011.

Will be talking to banks next week so will see how it goes.

D.
 
Still waiting for a response, I'll post the response when I receive it
 
Response from [email protected]

I am replying to your recent e-mail regarding Mortgage Interest Relief and, in particular, the changes to the current rate.

Section 244(1A)(b)(i) Taxes Consolidation Act 1997 (as amended by the Finance Act of 2009 and 2010) states -

(i) for the year of assessment 2010 and subsequent years of assessment up to and including the year of assessment 2017 in respect of qualifying interest paid in respect of a qualifying loan taken out on or after 1 January 2004 and on or before 31 December 2011........

It is on the basis of this legislation that Revenue determined that, in your case, the mortgage interest relief rate is based on the drawdown date and you would be entitled to trs at the rate applicable for 2011.

To summarise your questions

1. Is the mortgage interest relief rate deadline based on the drawdown date or the date of first payment?
Drawdown date
2. Does the application form have to be submitted prior to 31st December 2011 to qualify or can this be done after that date if the drawn down or firs payment date (depending on the answer to the above is before 31st December 2011?
Application should be submitted online as soon as first payment has been made. Contact should be made with TRS Section by email at [email protected] or LoCall 1890 463626 once you have made online application.
3. If the deadline is based on the first payment date, is it acceptable to make a manual payment before the deadline rather than wait for the direct debit to qualify?
You would need to contact your lender if you wish to make a manual payment.

I trust this clarifies the position.
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Thanks very much for posting the reply stefg.

Hmm,the answer to number two and three is still a bit ambiguous to my mind.
The only date I saw when applying online was the "date of first payment", no mention of drawdown.
The "answer" to question three doesn't answer your question at all.
I am still of the opinion that its best to make a manual payment before Dec 31st if at all possible to be on the safe side.
 
Hi RiceCakes,

I actually think the response was fine for what I asked and I don't think it's ambiguous.

The drawdown date sets the rate. The relief can only be applied for after the first payment but the rate is already determined. And question 3 was only if it was based on payment date which it is not.

So I think it's fine. I will probably make an early payment if possible to be over cautious but I don't think there is any need.
 
the legislation is clear that it is the drawdown date that is relevant and so, if you didn't make a payment until well into 2012, you would still qualify provided the drawdown happened in 2011.
 
If there is any doubt and you can afford it then just make an accelerated repayment (of even €1) on the day that you draw down the mortgage?
 
ClubMan said:
If there is any doubt and you can afford it then just make an accelerated repayment (of even €1) on the day that you draw down the mortgage?
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Clubman that was my thought exactly! We would literally just make a token 1 euro payment in advance just so we have peace of mind when filling in the online TRS form and put in Dec xx 2011 as the date of first payment :)
 
RiceCakes said:
Clubman that was my thought exactly! We would literally just make a token 1 euro payment in advance just so we have peace of mind when filling in the online TRS form and put in Dec xx 2011 as the date of first payment :)
Click to expand...
It seems (based on info posted above and elsewhere) to be unnecessary but maybe do it if you just want to cover all the possibilities...
 
TRS Relief

Once you mortgage is issued in December, you will qualify in this years Tax Relief year - you only need to pay interest for one day in 2011 to qualify - even if your first payment is in Jan 2012. However, as the revenue go on a calender year, you will only have 6 years for the relief period.
E.g. mortgage issued 15th Dec - you can claim relief from 15-31st Dec 2011 (year 1), then fully each year until end 2017.

You do not need to make any manual payment as the bank do not determine the relief - it comes directly from the revenue, and simply calculated based in the interest you have paud for a period of time, so my advice would be simply make sure your mortgage issues before the banks close for the new year, and two/three days after the mortgage issues and your solicitor cashes the cheque, apply on line for the TRS.
 
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