I suspect that this is incorrect advice and you can only offset interest on the original loan for the now investment property against rental income generated by that property. On the other hand the additional equity release used to purchase the new owner occupied property would qualify for owner occupier mortgage interest relief and maybe that's what your broker (what sort of broker?) was referring to?scallywag said:However, in my case the equity release is not directly paying for the investment property, it's helping me buy a new residence for myself. I have been advised by a mortgage broker nonetheless that I WOULD get the tax relief on the interest paid on the loan.
What do you/he mean by "relief" in this context? Writing the interest off against rental income or owner occupier mortgage interest relief? As I say I am pretty sure that you can only write off interest on the original amount of the loan that is outstanding and not on any top-up used to purchase a new PPR (which will, however, qualify for owner occuppier mortgage interest relief).scallywag said:The mortgage broker concerned is from a large reputable firm, and he's definitely saying that I get relief on the rental income,
How does he reckon that releasing equity in the investment property to buy a new PPR is a business expense?!based on the interest-only mortgage. Basically he's saying that the loan is considered as a business expense of my investment property.
Well you can't claim both so if he's saying that you can write the interest on the topped up loan against rental income (which I think is NOT the case) then you can't also claim owner occupier mortgage interest relief on the same interest.On my new home residence, I'll just get the standard non-first-time buyer mortgage interest relief.
They just give out information and they can get it wrong. If in doubt get independent, professional advice on the tax issues from somebody authorised and qualified to dispense such advice and who does not have any vested interest in selling something to you.I've emailed revenue.ie today with this question, I suppose it would take a while to get a reply. I was thinking of ringing them - do they normally give out advice such as this?
The mortgage broker concerned is from a large reputable firm
WizardDr said:Actually if structured right you would be, do what you are doing and you definitely won't get it.
Take the situation where you raise equity release whilst this is your current home.
And you then have (say) an 80% loan on this;
Then borrow for your new PPR.
What is the status then of the borrwoing on the the property that is now an Investment property ..
In fact, give the Revenue the headache and persist in working out the logic.
Alternatively, raise borrowings on it and acquire another one ..
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?