When does TRS clock start?

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MugsGame

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Split from original query..

People drawing down mortgages now may wish to wait to January so that they maximise the TRS available.

There is some discussion below over when the TRS clock starts. Is Year 1 when you draw-down, or when you make your first repayment?
 
Re: when will builders look for money?

Hi

Your TRS qualifying period starts on the day the money is drawn down.

Our snag inspection was carried out on 10 September and we closed on 3rd October.

You said your house will be ready in 2 weeks, I presume you won't have snag inspection done until the builder says the house is complete, say the next day? That's 8/9 December.

It is acceptable/likely that once your snag inspection is carried out that there will be snag work to complete, then you would resnag the property to ensure work has been carried out to your satisfaction.

If that takes time, and brings you close to Christmas I would ask my solicitor to check terms of your contract to see if it would be acceptable for you to delay closing until the first business day in January. I can't see that a delay of a couple of weeks would not be acceptable.

Good luck in your new home

Betsy
 
Re: when will builders look for money?

BetsyClark said:
Your TRS qualifying period starts on the day the money is drawn down.
Click to expand...

I believe you don't qualify until you pay interest. You don't pay interest until you start repayments. The [broken link removed] claim form requests you to enter the
Date of 1st repayment on this loan account.
Click to expand...
 
Re: when will builders look for money?

Hi Mugs,

I recently rang Revenue TRS helpline about this and they told me that TRS starts from the date the mortgage is drawn down, which would be very relevant if you were a first time buyer and drawing down in late December, as your first "year" of TRS would be 2008, leaving only six years of TRS at the higher FTB rates.

Granted, this conflicts with the data they collect on their TRS1 form, but I wonder if they also get information from the lender.
 
Re: when will builders look for money?

Thanks Liam, sounds like I'm wrong then and Betsy is correct about the treatment. I think this creates a number of anomalies and inconsistencies.
 
Re: when will builders look for money?

MugsGame said:
Thanks Liam, sounds like I'm wrong then and Betsy is correct about the treatment. I think this creates a number of anomalies and inconsistencies.
Click to expand...

I closed in Dec, made my first repayment end of Jan and my TRS was paid from Jan and not Dec.. so it goes on first repayment date as per the TRS1 form.
 
Re: when will builders look for money?

Yes, I think we are all agreed you will only get your first Tax Relief with your first repayment.

The area of dispute is where I draw-down in Dec 2008 but don't make my first repayment until Jan 2009. Is 2009 Year 1 or Year 2 for TRS purposes? Revenue have told people it's Year 2. I'd suggest the Finance Bill(s) would hold the definitive answer.

NB I am not recommending that people delay repayments or drawdown. Especially in the current climate it is prudent to draw down when you can rather than risk a loan offer being rescinded. I am just interested in the TRS implications in the situation described.
 
Hmm, I stand corrected - I got the following from Revenue.ie

"It is important to note that the upper limits for first-time buyers apply for the tax year in which the mortgage is taken out plus six subsequent qualifying tax years."

and it is ambiguous..... I look forward to clarification.

Betsy
 
Hi everyone,
Rang revenue today about this and the woman I met told me that the TRS doesn't kick in until the date of your first repayment. We are in the same position and will be ready in about 2 wks to drawdown but was worried in case we would lose a year. There seems to be some discrepancies though so I'll ring again tomorrow and see if I can get confirmation from some other person.
 
For those of us who started with stage payments, should it apply right at the end or on the interest being paid back on the first lump of borrowing?
 
I drew down my mortgage at the beginning of August, First repayment due end of September but first repayment not taken until 1st week in October. On this basis, do I just take 3 months interest (October/November/December) when calculating the amount of TRS I should get or do I take four (September - December). No-one seems to know the definite answer
Any ideas??
 
I am switching from bridging loan to Mortgage at the moment and paperwork should be ready in a week or so. So can someone please clarify if it better to hold off until January for repayments in order to gain maximum relief.
 
musicfan said:
I drew down my mortgage at the beginning of August, First repayment due end of September but first repayment not taken until 1st week in October. On this basis, do I just take 3 months interest (October/November/December) when calculating the amount of TRS I should get or do I take four (September - December). No-one seems to know the definite answer
Any ideas??
Click to expand...

TRS is annual so you can take 100% of the interest you have paid in 2008 and get TRS in respect of it. The only question where timing is important is if there is a difference in the drawdown date vs date of first payment and where the difference spans the change in calendar year.
 
Hello All

I too am in the same boat. I had to draw down my morg.early as i was going to lose the tracker rate if i didnt. So I dont have the keys to my apt yet but the interest from the cheque which my Solictor is holding paid for my first morg. repayment, long and short of it is. i rang the Revenue and got 3 different answers. but i have come to the conclusion that i will only get TRS on NOV/Dec and will lose out on my first year TRS as such.
 
Re: when will builders look for money?

MugsGame said:
I believe you don't qualify until you pay interest. You don't pay interest until you start repayments. The [broken link removed] claim form requests you to enter the
Click to expand...

Well the other way to look at it is that you pay interest in arrears, so the interest paid in January, is really interest for December/January.
 
Re: when will builders look for money?

but because I am a frist time buyer the first 2 years are the ones i get the most money on, then the money is reduced, so i will be on my second year from this Jan 09. not very good at explaining this but do ya get my drift


plant43 said:
Well the other way to look at it is that you pay interest in arrears, so the interest paid in January, is really interest for December/January.
Click to expand...
 
I would advise anyone ringing revenue to ask to speak to someone senior. The person I got on the phone couldn't even tell me herself if TRS ran on the tax/calendar year, never mind if it kicked in on first payment or drawdown.

I spoke to my bank and they said it would be on first payment so it was safe to draw down in December and have our first payment in January.

If anyone else gets solid clarification from the revenue please do post!
 
I just rang revenue myself. The vagueness of their answer was frightening. The question I asked was 'If I draw down my mortgage in December and have my first repayment in January will my 1st year of TRS be 2008 or 2009.

Answer: 'you should be ok for it to start in 2009'.

Apparently there has been talk about this in the Revenue office and they themselves haven't got an answer.

Guy on the phone said that it is calculated from your drawdown date, but since the form only asks for date of your first repayment you 'should be fine'. Seriously??? That answer is insane for someone who is concerned about securing relief of thousands of euro. Only in Ireland.

I also asked what would happen if they changed the form in January to date of drawdown - yes, we could be stung then. Ridiculous.
 
How are bridging loans treated when calculating TRS? I drewdown May 07 bridging part of self build mortgage and began interest payments immediately. Can I claim TRS on this?
 
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