Mortgage Interest Relief

K

Keith_D

Guest
I was wondering if somebody could clarify my question in relation to claiming Mortgage Interest Relief. As I understand it and from what I have read on the revenue websites all first time buyers of their main residence in Ireland can claim tax relief in respect to the interest paid on their mortgage loen until the year 2017. Mortgage interest relief for first time buyers in 2012 is 25% for the first and second year, dropping to 22.5% in tax years three, four and five. Finally dropping to 20% in the final years. However if the home loan or mortgage is taken out in the year 2013 this tax relief will not be available.

My question is this, I will very soon signing my mortgage loan with a financial institution here in Ireland and wish to avail of their repayment deferral period, and as a result my first mortgage repayment will not be made until January 2013, although the mortgage itself was taken out and signed in 2012. Will I still be able to claim tax relief in relation to the interest I will be paying on my mortgage?

I would really appreciate any clarification anyone can provide
 
You should probably speak to the bank about it. I would start paying this year if there is a possibility that you will miss out on the interest relief.
 
The first payment needs to be made in 2012 but you could transfer say 1 Euro in for it to count as a repayment which should be enough for the interest relief.
 
talk to revenue 1890 46 36 26
they are really helpful

you may get away with it due to interest being charged in 2012.
 
Condition of Mortgage Interest Relief 2012

Hi there

I am in a similiar position in that we are purchasing a house but there have been delays due to probate and missing title deeds. At this stage, we are worried about missing out on the end of year deadline for closing the sale.

The revenue website says: Tax relief is available in respect of interest paid on a qualifying loan, taken out on or after 1 January 2004 and on or before 31 December 2012, which was used to purchase, repair or improve a qualifying residence. Taken out prior to 31 December 2012 means that the loan has been drawn down and used by you on the qualifying residence (e.g. purchase of site plus building costs) before that date.

Can you tell me if you were told that a repayment had to be made on the loan in order to qualify for the mortgage interest relief? My reading of the statement above is that the mortgage has to be drawn down to qualify?
 
I spoke to the Revenue last week and they stated that the mortgage simply has to be drawn down this year. It doesn't matter if the first repayment is not until 2013.

If possible, I would still try to make a repayment this year, just to be sure to be sure!!
 
I got married during the summer. Both my wife and I have our own homes. My wife moved in with me after we got married. She has not rented out her house yet. Is she still entitled to mortagage interest relief?
Many thanks for any clarification on this.
 
Hi, we are in same boat, drawn down since early November but like others, problems closing due to land registry judgements getting removed etc. We are unlikely to close pre December 31st. Going to contact Revenue to find out what is the protocol.
 
Keith_D said:
As I understand it and from what I have read on the revenue websites all first time buyers of their main residence in Ireland can claim tax relief in respect to the interest paid on their mortgage loen until the year 2017.
Click to expand...

From the way the above is worded I wonder if you owned a property outside Ireland at some point? If so, you won't get any relief as you're not a first time buyer - see Revenue [broken link removed].
 

No. Mortgage interest relief is only available on your principle private residence. She no longer lives in her house, so she is not entitled to it.
 
We drew our mortgage down last week and, while the contracts have been signed, we have not yet closed

1. Will we get mortgage interest relief if we close after 31st Dec even though mortgage has been drawn down

2. If we can still get mortgage interest relief as per question 1 can we close after 31st to ensure that we also get the 2013 property tax exemption
 
Strictly Speaking I think The legislation requires that the loan is applied to the purchase of a house in 2012 to make it a qualifying Loan. However in Practice I believe and have been told that MIR will be available as long as the loan is drawn down.

You cannot get both MIR & LPT exemption as far as I am aware
 
Sorry to correct Wind up - but there are two 'tests' I've been told that need to be met - you need (a) to draw down the mortgage i.e. your solicitor needs to have the monies cleared to their client account & (b) the sale needs to be closed i.e. contracts signed and payment made to the vendor.

I am in this boat at the moment and meet (a) but due to a TCC issue with the vendor seems we cant make (b) before year end.

any views on this could be resolved would be welcomed !!
 
Hi Fiver

Were you told this by Revenue or by the Bank?

I agree that from the legislation both conditions have to be met so I assume it was Revenue told you this.

What will happen in practice is another story.....
 
thks Wind-up,

the source for this is the Revenue - I hope there will be some flexibility in their approach as our mortgage funds are fully drawn down and currently we are accruing mortgage interest (inc life assurance and house ins !!)

If you have any advice on this issue I would welcome it, as I feel a little sick as you can imagine on missing out due to circumstance beyond my control. I'm sure there are others in a similar position out there aswell.
 
Yeah , know how you feel ... We were lucky and managed to close this week.. It initially looked lke we wouldnt ; Everybody besides revenue were assuring us it would be fine. At the same time we were obviously delighted to close before the 31st . If you look over on board.ie there are other opinions
 
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