Revenue have just published a useful guide on mortgage interest relief
The key points are:
- Tax relief for mortgage interest on a home loan is tax relief given to mortgage holders based on the interest paid on a qualifying mortgage on your home.
- This includes a new mortgage for a home, a top up loan used for the purposes of developing or improving your home, a separate home improvement loan, a re-mortgage or consolidation of existing qualifying loans secured on the deeds of your home.
- The mortgage interest relief is given at source, by your mortgage provider, either in the form of a reduced monthly mortgage payment or a credit to your funding account.
- You do not have to be earning a taxable income to qualify for mortgage interest relief.
- You can also claim tax relief in respect of the interest on a mortgage paid by you for your separated/divorced spouse or former partner in a dissolved civil partnership.
- You can also claim tax relief in respect of a dependant relative for whom you are claiming a dependant relative tax credit (i.e. widowed parent or a parent who is a surviving civil partner or elderly relative).
- Switching lender or mortgage type to achieve a better interest rate is not the same as taking out a new loan. However, a new mortgage when you move home and take out a mortgage with a new or existing lender is eligible for relief.
- A mortgage taken out from 1st January 2004 to 31st December 2012 used to purchase, repair, develop or improve your sole or main residence, situated in the state, is eligible for mortgage interest relief until 31st December 2017.
- Mortgages taken out after 31st December 2012 will not qualify for mortgage interest relief.
- Mortgages taken out prior to 1st January 2004 are no longer eligible for mortgage interest relief.
- Top up loans / equity release loans taken out since 1st January 2004 on these pre-2004 loans may be eligible for mortgage interest relief provided they are used to purchase, repair, develop or improve your sole or main residence situated in the state.
- From 1st January 2012 the rate of mortgage interest relief for first time buyers who took out their first mortgage between the years 2004 and 2008 and are residing in the property increased to 30% until 2017.
- If you took out a loan outside those dates the existing rules remain unchanged.
- Mortgage interest on loans taken out for investment, rental, secondary or any properties other than your main residence does not qualify for interest relief.
- If you are living in the state and paying a mortgage to a qualifying lender in the state but working in Northern Ireland, you can still claim mortgage interest relief in this country provided you have a PPS number.
- Other loans such as loans in sterling (UK currency) are not eligible for relief through the Tax Relief at Source Scheme but may be eligible for relief from your local tax office.
- Where a parent is a co-mortgagor/guarantor and is not living in the mortgaged property or making any repayments on the mortgage, the person’s eligibility for Mortgage Interest Relief at the rate applicable to the first time buyer is not affected by the fact that a parent is also party to the mortgage deed.
- Home loans taken out in 2013 or later do not qualify for mortgage interest relief.