Mortgage interest tax relief

J

jasdpace@gmail.

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Quick question: I rented out a property for the first 6 months of 2022 and sold it in December 2022 - i.e. no rent from July onwards.

For tax purposes, is the allowable interest on the mortgage the interest paid in the first 6 months or the full year?
 
Was it your home for the second six months? Clearly if it was your home, the interest is not allowable.

But if it was not your home, why would the interest not be allowable?

Brendan
 
Because renting property is a taxable occupation and the interest charged in the later 6 months - whilst the property is being sold and in conveyancing - is an expense to that enterprise. My question was whether this business expense can be considered an expense for tax purposes.
 
Were you trying to rent it out but were unable? Unlikely in today's market. But if you were, the interest seems to be allowable during void periods? Perhaps the decision to the sell it after this void period might suggest that you can't claim the last six months. This must be a common query as most landlords sell with vacant possession so will have a void at the end.

What expenses are allowed?

This page outlines the expenses you can deduct from your taxable rental income
www.revenue.ie www.revenue.ie
 
misemoi said:

What expenses are allowed?

This page outlines the expenses you can deduct from your taxable rental income
www.revenue.ie www.revenue.ie
Click to expand...

Thanks misemoi. The reason for the query is that this specific void is not specifically covered in the guidance notes. (To elaborate on the query - tenancy ended at the end of June. The sale and conveyancing process took six months - not an unreasonable amount of time. I did not seek to rent the property out during this time.)

Apologies Brendan - I misread your post. I didn't see the "not"......SORRY!
 
Isn't there an area on the return where you can fill in about any doubts you may have? you could submit the return with the 12 months and then mention this query. I assume that returns with information in that field get reviewed somehow? That way you would know for sure. you have enough time to do the return now if doing it online and paying after when you get the true amount owed.
 
misemoi said:
Isn't there an area on the return where you can fill in about any doubts you may have?
Click to expand...
There's no doubt here though.
jasdpace@gmail. said:
Thanks misemoi. The reason for the query is that this specific void is not specifically covered in the guidance notes. (To elaborate on the query - tenancy ended at the end of June. The sale and conveyancing process took six months - not an unreasonable amount of time. I did not seek to rent the property out during this time.)
Click to expand...
 
jasdpace@gmail. said:
The reason for the query is that this specific void is not specifically covered in the guidance notes.
Click to expand...

Are you sure?

Would this be relevant to your situation:-

Section 4 of the Tax and Duty Manual dealing with the deductibility of mortgage interest says:

"interest is not deductible for the period following the purchase of the premises up to the time a tenant enters into a lease, nor after the period of the last letting."


The last letting ended at the end of June. There was no void between lettings.
 
Last edited:
Thanks AAAContributor,

What you posted is beyond doubt. The guidance notes that I was referring to webpage supplied by misemoi - I hadn't looked at the additional guidance notes which you have helpfully supplied. Thanks for taking the time to do this.

To be honest, my gut was that these expenses wouldn't be allowed and I had no reason to doubt Rozbig's confirmation from yesterday.
 
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