I found the relevant section from the revenue, but it doesn't seem that clear to me.... Anyone else understand this better?? Thanks!
What is the position with regard to interest paid on borrowings?
Certain restrictions were introduced on the deductibility of interest on borrowed money used on or after 23/4/1998, in the construction, purchase, or repair of rented residential premises in the State, or 7/5/1998 in the case of foreign residential premises. However, the relief for interest on borrowed money was restored for such interest accruing on or after 1 January 2002. There were some transitional arrangements in place in the interim period.
Relief is disallowed as respects interest accruing on or after 6 February 2003 where the let premises was purchased from the spouse of the person chargeable in respect of the rental income. However, the disallowance of interest relief does not apply in the case of legally separated or divorced persons.
Where a loan has been used to purchase, improve or repair a rented residential property and the interest on the loan accrues on or after 7 April 2009 (Budget Day), only 75% of the interest on the loan can be deducted as a rental expense instead of the normal 100%. For the purposes of the restriction, the interest is treated as accruing on a daily basis. The date the loan is taken out is not relevant.
The restriction does not apply to loans taken out to finance non-residential property and the full amount of interest continues to be deductible in such cases. In the case of mixed residential and non-residential properties interest should be apportioned on a just and reasonable basis before the restriction is applied to the residential part of the interest.
For the year 2006 onwards interest is not deductible where the person making the claim has not complied with the registration requirements of the Private Residential Tenancies Board in relation to any tenancies in the particular premises.
All queries relating to the registration requirements/process should be directed to the
Private Residential Tenancies Board, 2nd Floor, O'Connell Bridge House, D'Olier Street, Dublin 2. Telephone: +353 1 6350600 10:00 am to 1:00 p.m. and 2:00 p.m. to 4:00 p.m. Monday to Friday. Fax: + 353 1 6350601 or
www.prtb.ie[broken link removed]
Interest on any loan, or part of a loan, that is used to pay stamp duty, legal fees and other expenses incurred in relation to the purchase, improvement or repair of a premises is not deductible. Only interest relating to the actual purchase, improvement or repair costs is deductible.