Mortgage Interest Relief for First Time Buyers

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ezlistener

Guest
I hoping someone can answer this question.
Married couple bought as first time buyers in October of 2003. Revenue Tax credit was €134.88 monthly that being 20% of €8000 allowable under the scheme. I note that it has changed this month Jan 2005 and reduced to €107.89.

Why has this changed and is it correct.?
 
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EvilDoctorK

Guest
ezListener

My understanding is that the allowance is €8000 pa for a married couple - allowable @ 20% (1/2 that for a single person)

This means that if you paid over €8000 in interest over the year then you are entitled to the full credit of €1600 (which is around the €134pm you quote)

At a guess what may have happened is that a combination of the declining value of the mortgage/lower interest rates may mean that this year you won't be paying €8000 in interest .. therefore don't qualify for the full relief

e.g. if the avg. balance on your Mortgage for the year is €250k and you're on a rate of 2.99% then your interest bill for the year would only be €7,475 .. thus you wouldn't qualify for the full €8000 relief
 
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ezlistener

Guest
Thanks for that EvilDoc, I did a few more calculation to work out what the interest charge situation is and I am not paying the full 8000 threshold. I suppose I should be thankful for that. :rollin
 
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