Tax Relief on Borrowings ?

P

Pol

Guest
I am currently in the process of purchasing an investment property (my first) . The cost is 31700 Euro of which I have been approved for a 90% mortgage. I intend to borrow the remaining 10% from my local credit union. My question is, shall I be entitled to claim back the intrest paid on both loans from my rental income from the property or is the tax relief only applicable to the main mortgage i.e. the 90% ? In which case I should pay the credit unions 10% back quickly
 
Hi Pol,

You only get interest relief on your mortgage.
You will only get mortgage interest relief for the 90% which is a mortgage loan.
 
Not true. Tax on any loan(s) used to purchase/renovate an investment property, not just a mortgage and not just mortgages secured on the investment property where cross charging of mortgages (e.g. against another property) is used, can be set against rental income. Note that you don't "claim back interest" - you offset it as an allowable expense against rental income when calculating your tax liabilities.
 
Clubman is correct.

I would suggest though you still pay off the CU first as the interest rate is likely to be higher
 
sorry for the incorrect response.

i was thinking of your PPR where you can only claim mortgage interest relief on the mortgage loan AFAIK, is that correct?
 
ANC said:
sorry for the incorrect response.

i was thinking of your PPR where you can only claim mortgage interest relief on the mortgage loan AFAIK, is that correct?
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Correct, you can only get mortgage interest relief on your PPR
 
yes my friend asked the tax office about this before. she has a loan from the credit union for her deposit and the tax office said she could claim back money from the interest paid.
Anyone know how it is worked out?
I think she got a loan of €40,000 over 9 years overall interest i think she was saying is €20,000 which i think is expensive. I wonder how much she would get back doh
 
PINK said:
I wonder how much she would get back doh
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A maximum of €4,000 p.a. @ 20% = €800 p.a. or €66.67 p.m. if she is a first time buyer owner occupier. €2,540 p.a. @ 20% = €508 p.a. or €42.33 p.m. if she is a non FTB owner occupier.
 
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