Property Tax & Tax Relief

[BPOSULLIVAN]

We are in the process of buying a new primary residence. We have an additional property bought by myself before I got married and the plan is to rent this property. A couple of queries...

1. Wondering what are the implications of the proposed property tax being mooted in Budget 2009 on us? What is the worst case financial implication? We are assuming that any property tax will only apply to our rented property.

2. I am currently getting mortgage interest relief on my second property (the one we plan to rent). Do I need to let revenue know that the mortgage interest needs to be switched to the new property or is this handled by the bank?

Thanks..

 

[Snarl]

On 1, I would not just presume that the tax will apply only to your second residence - the amount needed by the government is billions, not tens of millions, so they will need to look at raising thousands on average from each of the 2bn households in the country. If I were planning and looking at the finances, I would expect to have to pay at least 0.5% of the value of all your properties each year and perhaps as much as 1%.

On 2, I'm not an expert so I'll leave it to others to answer for sure, but I think the banks sort this out at source, so you probably just need to tell the bank.