Many thousands of mortgage payers in Ireland still get tax relief on mortgage interest payments. It is known as Tax Relief at source or TRS in Ireland. Since January 2013 all new mortgages no longer qualify for Tax Relief.
Mortgage interest relief will be gradually phased out – so no one in Ireland will be getting it after 31 December 2017.
In 2010 – €375 Million in TRS was paid out in Ireland . At the peak – TRS cost the taxpayer €705 Million a year in 2008.
Summary of Mortgage Tax Relief Rules
For mortgages taken out before January 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 (See 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 single people
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%
Mortgage tax relief probably contributed to the price increases and the property bubble in Ireland – because it helped buyers buy more expensive properties. Mortgage interest relief – was worth as much as €416 a month to first-time buyers
Mortgage Tax Relief or TRS is given, by your lender, either in the form of a reduced mortgage payment or a credit to your bank account.
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