Mortgage
payers in Ireland can still get tax relief on mortgage interest payments.
It is known as Tax Relief at source or TRS in Ireland. Figures
Updated after Budget 2012
In 2010 - €375 Million in TRS was paid out in Ireland
. At the peak - TRS cost the taxpayer 705 Million in 2008!
Mortgage interest relief will be phased out - so no one in Ireland
will be getting it after 31 December 2017.
From January 2013 all new mortgages will no longer qualify for
Tax Relief.
Summary of TRS Rules
For mortgages taken out before Jan 2004 – the TRS entitlement expired
in 2009.
Home loans taken out on or after 1 January 2004 and on or before 31
December 2012 will (subject to the exception below) qualify for tax
relief up to the end of 2017 at the following rates and thresholds:-
- First time buyers The tax relief is 25% for years 1 and 2;
22.5% for years 3,4 & 5 and 20% for years 6 and 7. The maximum amounts
of interest paid qualifying for tax relief are : €20,000 for individuals
who are married, in a civil partnership or widowed €10,000 for individuals
who are single. After year 7, the rates and thresholds for relief
drop down to the rates for non-first time buyers (Below)
Non-first time buyers - The tax relief on interest paid on
qualifying home loans is 15%. The maximum amounts of interest paid
qualifying for tax relief are €6,000 for individuals who are married,
in a civil partnership or widowed €3,000 for individuals who are single
Exception:- For individuals who purchased their first principal
private residence on or after 1 January 2004 and on or before
31 December 2008, the rate of tax relief will, for the tax
years 2012 to 2017, be 30%
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Mortgage tax relief probably contributed to the price increases and
the property bubble - because it helped buyers buy more expensive
properties. Mortgage interest relief – was worth as much as €416
a month to first-time buyers . It is available for up to seven years
after taking out a mortgage.
It is available on interest payments of up to €20,000 a year . The
current 2011 rates of TRS relief for first-time buyers are
25% for the first and second year , 22.5% in years 3, 4 and
5. and 20% for tax years 6 and 7.
Mortgage Tax Relief or TRS can currently be claimed on a new
mortgage, a top up loan, a home improvement loan, a re-mortgage or
a consolidation of existing borrowings.
The mortgage tax relief is given, by your lender, either in the form
of a reduced mortgage payment or a credit to your bank account.
You can also claim mortgage tax relief in respect of a mortgage paid
by you for your separated/divorced spouse, and a dependent relative
(i.e. widowed parent, elderly relative) for whom you are claiming
a dependent relative tax credit.
Mortgages taken out prior to 1st January 2004 are no longer eligible
for mortgage interest relief. However, top up loans/equity release
loans taken out since 1st January 2004 on these pre-2004 loans may
be eligible for mortgage interest relief
Go
here for the Lowest
mortgage rates in Ireland -
TIP:
Don't assume you will automatically get the relief. To ensure you
get mortgage interest tax relief - you need to complete a form TRS1
form available from your mortgage provider or from Revenue.ie.
The TRS Helpline number is 1890 46 36 26
