Rental mortgage lean against main residence

Hi,
I'm changing over to NIB tracker mortgage and have loans on both main residence and rental property. NIB suggest I put the two loans against the main residence (better rate) but I'm concerned that the rental relief I claim at the end of the year against the rental property will not be granted due to the fact that the rental property will not be featured in the mortgage. However, I will have two accounts showing transaction, for one amount (PPR) and the other for another amount (rental).

Is it necessary for the address of the property to appear on the statements received from the bank? Can anyone see any problem with putting the two against main residence in relation to my annual tax return for the rental property.

The mortgage for the rented property doesn't have to be secured against it for you to be able to offset the interest against the rental income - as long as you can show that the money was used to buy the house it can be secured against your main residence. Having the the two accounts is fine for this scenario.

Sarah

www.rea.ie

The issue here is what the various loans are used for and not what property they are secured on. If you use a loan to buy or renovate an investment property then you can offset interest on it against rental income. This is the case regardless of the fact that it may be secured against another property or asset or may even be unsecured (e.g. a personal loan). If you combine the loans then you need to calculate and keep clear records of what portion is attributable to the rental property and what portion is attributable to the PPR. Revenue may not require these up front but could look for corroboration if they decide to investigate/audit you. As ever you should get independent, professional advice on the taxation issues that arise here.

Post crossed with SarahW's.

Many thanks Sarah and Clubman. That's really clear and helpful.

All the best