TRS - has the rate changed?

A

ACA

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Just checking the joint a/c and noticed that TRS received this month is €9 odd less than the last 4 months, (on-line statement only goes back that far). I'm on a fixed rate of 4.38% until May 2008, FTB and have had my mortgage for 4 years this May. Has the rate of relief changed?

I know that it's only €9 and probably not worth losing sleep over but, better in my pocket, than the tax mans!:rolleyes:
 
The TRS is calculated on how much interest you are paying. You are probably paying slightly less interest than you were last year, hence the reduction in your TRS.
 
The nature of a fixed rate mortgage is that the interest paid is the same for the term.! I have had this problem also. I was expecting my trs to double as in budget or thereabouts but instead my mortgage repayment has increased! Im on a fixed rate until 2008 also.

Im waiting for them to correct it. I believe that if you purchased your house and miss a month or there are changes and they are not done for the first months mortgage payment ( in january) then this will be paid out over the next 11 months of the year with your new higher trs.
 
sorry MR D im sure you mean that he has cleared a small amount off his capital sum!!

I would say that they have not made the new TRS changes to his account yet though. it should be alot less (his repayments) and not 9 euro higher though
 
You should not be claiming owner occupier mortgage interest relief on a loan used to purchase an investment property. Since this query was posted in the Property Investment forum I am assuming that this is the case.
 
ClubMan said:
You should not be claiming owner occupier mortgage interest relief on a loan used to purchase an investment property. Since this query was posted in the Property Investment forum I am assuming that this is the case.
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I assumed the person just posted in the wrong forum! ClubMan is of course correct, and if this is an investment property then TRS is not allowable.

If it's not an investment, the discrepancy may have arisen purely because the principle repayments mean that the interest portion of your payment is reducing. While the fixed rate means that your rate and your payment remain the same, the amount of interest in each repayment reduces as the capital balance is brought down.
 
Since ACA is a long time poster and, as such, most likely familiar with the purpose of the different forums I assumed that s/he posted in the correct one and that this is an investment property query. Maybe ACA can clarify?
 
ClubMan said:
Since ACA is a long time poster and, as such, most likely familiar with the purpose of the different forums I assumed that s/he posted in the correct one and that this is an investment property query. Maybe ACA can clarify?
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I'd have thought a long time poster would also be familiar with the PPR requirements for claiming TRS ;) .
 
Sorry for the delay in replying to posted queries. I posted my question here as it was a taxation question and on the home page it states for property tax queries go to property investment.

I had assummed (possibly incorrectly!) that since I was on a fixed rate mortgage, any payments would remain constant, including TRS - as per moneyman.

Clubman pls feel free to move this thread to a more appropriate forum, long day yesterday and I probably didn't look properly before posting - sorry.
 
ACA said:
I had assummed (possibly incorrectly!) that since I was on a fixed rate mortgage, any payments would remain constant, including TRS - as per moneyman.
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Not the case; because the repayments are annuitised over the term, you pay more interest in the early stage of the mortgage, with the balance of your payment being applied to reduce the capital outstanding.

If you look at your last or next mortgage statement, you'll be able to see the interest charged each month: that's effectively the interest proportion in that month's payment. Do check it, of course, because banks and Revenue do make mistakes occasionally - but the change is not necessarily an error.
 
i thought TRS was doubled though and the change in interest paid in the first few years would not be that substantial?
 
money man said:
i thought TRS was doubled though and the change in interest paid in the first few years would not be that substantial?
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Not quite: the amount on which the relief is allowed has doubled, which isn't the same thing. Whereas tax relief was previously allowed on €X mortgage interest at the standard rate of tax, that's now €2X - but you don't get double the relief unless your interest is at or above the new upper limit.

The change in interest in the first few years often isn't huge, but again the effect depends on the term of the mortgage, the period over which the relief was claimed in previous years, etc.
 
Thanks for the explanation Dreamerb .... never thought of it that way!
and thanks to everyone else for the replies
 
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