Mortgage interest tax relief

S

sarahfleming

Registered User
Messages
170
Hopefully someone can help me here. When you are granted this relief, does your lender automatically tell you what your relief is and when there is money to be backdated how is this calculated and when do I see the benefit of this. I am a single person so just wondering how much of a reduction in my monthly repayments will I be granted. All replies appreciated thanks
 
As far as I know the mortgage interest tax relief should be listed as a credit on your mortgage account statement. Do you not see it? Have you queried this directly with your lender?
 
Usually the lender will send you a form to fill out to claim the interest relief. The relief works out at 800 per year so if you start your mortgage during the year you will still get 800 in relief. And it is backdated to when you started paying off the mortgage in case you dont immediatley get the relief.

In my case I get 66 euro per month credited directly into my current account every month, on the day the mortgage payment goes out of my account.

Also this interest relief is only for the first 7 years.
 
In relation to claiming the relief in the first place you can do this [broken link removed] if you have not already submitted the TRS1 form.
 
I think its 800 for first time buyers and 508 for single buyers. Similarly to steelblue I get the amount credited back to my account.

Can I add to the original question by asking: if I sell my current residence and upgrade, do I still qualify for 800 interest relief, given I only purchased 3 years ago and its less than the 7 year limit, or do I forgoe the 800 and now get the 508 interest relief??
 
Note that some of the mortgage interest relief figures on the Revenue website are out of date. However [broken link removed] are accurate. A single FTB qualifies for a maximum of €4,000 relief for the first 7 years of their mortgage. Since this is a standard rated credit this translates into €4,000 @ 20% = €800 p.a. or €66.67 p.m. in hard cash in the form of a reduction of that amount on mortgage repayments. Does that help?
 
sarahfleming said:
Why does it state that a single person relief is €4000 per annum on the web site??
Click to expand...

from revenue.ie...

You can only get relief on the interest charged/paid on your mortgage. The actual relief you receive is dependant on the ceiling or upper limit allowable.
For instance, if you are single and a first time buyer you will be entitled to an upper limit or ceiling of €4000. However a single person who is no longer a first time buyer is entitled to €2540.
You can calculate the relief you are due as follows:
Step 1
Compare your qualifying interest, i.e. interest charged/paid with the ceiling or upper limit given by Revenue. For example:
Qualifying interest in 2004 = €5000
Ceiling
Single first time buyer = €4000
As your qualifying interest exceeds your ceiling you can only claim relief on €4000.
Step 2
The relief is given at the standard rate of 20%. Your ceiling is multiplied by 20%(€4000 x 20% = €800). You will receive €800 for that year.
 
kev53 said:
if I sell my current residence and upgrade, do I still qualify for 800 interest relief, given I only purchased 3 years ago and its less than the 7 year limit, or do I forgoe the 800 and now get the 508 interest relief??
Click to expand...
In that case you would be a non FTB and would qualify for non FTB rates of relief.
 
Does the 7 year limit apply to the first 7 years of any/all of one's mortgage/s? i.e. what is the situation where one has qualified for and received the relief for the 7 years, and subsequently (e.g. 9 years after 1st mortgage drawdown) takes out a new mortgage to move up to a different ppr?
 
newbie said:
Hi Sarahfleming,

Try this calculator.... hope it is useful
[broken link removed]
Click to expand...

This calculator incorrectly calculates for a married couple - gives 2032 tax relief when the upper limit is actually 1016.
 
This tax relief, is this ~66 Euro per person (for 2 joint mortgage holders) or in total?
 
thats €66.67 max relief for a single first time buyer on their own.
 
Just had a look at that link for mortgages.ie and it works out at €1600 for 2 FTB's for the first 7 years which I suppose is €66/month each...would that be correct?
 
Related to this, I had a query which I just spoke with the revenue about on the phone.

I am a first time buyer and have bought my house with the help of a private loan agreement. For the first 2 years I will be repaying the private loan on the balance I required for purchase. According to the revenue - irrespective of the fact that the private loan is for the house, it is not from a registered bank/mortgage dealer and as such I do not qualify for Mortgage interest relief...

However, as my plan is to move to a regular mortgage (on the same property) in two years I asked if I would qualify then - and she said that yes I would start my 7 years as a first time buyer with mortgage interest relief from the date of change to a registered mortgage. As I am inherently sceptical of phone conversations, is anyone else aware that this is definitely the case?

Many thanks,

Jaskin.
 
Strictly FTB owner occupier mortgage interest relief applies to the first mortgage* on the first house purchased. In this case if your first mortgage starts two years after the property purchase then I reckon that she is correct and your 7 year FTB period for interest relief starts then.

* I believe that Revenue have some way of allowing for FTBs who remain in the first property but who switch/remortgage (e.g. with a cheaper lender) not being penalised by falling foul of the "first mortgage" rule. However I don't know the details.
 
Ahh excellent many thanks. I was also just a bit concerned with the movement of money and the classification of money for the house etc. As when I arrange a mortgage in a couple of years, obviously the money I draw down will be to pay off the private loan. However, as this private loan was for the house purchase I presume the revenue accept that it is in fact a mortgage, and my first one at that?

If I can find out about the mortgage switching I will post back here.

Cheers,

Jaskin.
 
Oh - you should bear in mind that only interest on loans used to purchase/renovate the property qualify for tax relief. For example if there is €200K outstanding on a private loan basis today and you take out a mortgage with a regular lender for €300K then only interest on the original €200K qualifies for relief. Topping up for other purposes (e.g. where the additional €100K would be spent on something else other than the property) does not qualify for owner occupier mortgage interest relief. Does that make sense?
 
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