{"id":11191,"date":"2022-04-19T19:36:13","date_gmt":"2022-04-19T19:36:13","guid":{"rendered":"http:\/\/legalblog.ie\/?p=11191"},"modified":"2023-08-27T17:15:55","modified_gmt":"2023-08-27T17:15:55","slug":"mortgage-reliefs","status":"publish","type":"post","link":"https:\/\/legalblog.ie\/mortgage-reliefs\/","title":{"rendered":"Mortgage Reliefs"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_63 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/legalblog.ie\/mortgage-reliefs\/#Mortgage_Interest_Relief\" title=\"Mortgage Interest Relief\">Mortgage Interest Relief<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/legalblog.ie\/mortgage-reliefs\/#Development\" title=\"Development\">Development<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/legalblog.ie\/mortgage-reliefs\/#Bridging_Interest\" title=\"Bridging Interest\">Bridging Interest<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/legalblog.ie\/mortgage-reliefs\/#Relief_at_Source\" title=\"Relief at Source\">Relief at Source<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/legalblog.ie\/mortgage-reliefs\/#Finance_Act_2012\" title=\"Finance Act 2012\">Finance Act 2012<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/legalblog.ie\/mortgage-reliefs\/#2017_Extension\" title=\"2017 Extension\">2017 Extension<\/a><\/li><\/ul><\/nav><\/div>\n<h3><span class=\"ez-toc-section\" id=\"Mortgage_Interest_Relief\"><\/span>Mortgage Interest Relief<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Mortgage interest was available in respect of interest paid on a qualifying loan to an Irish financial institution, where the loan was taken out to purchase, repair or develop a residential house, which is the main or sole residence of the claimant, his spouse or former spouse or a dependent relative. It has now almost ceased to be available<\/p>\n<p>Prior to 2002 it was claimed as a tax allowance, and later a tax credit. The relief was later granted by direct payment by the Revenue to the Lender.\u00a0 The interest due was reduced by an amount, which is in effect paid by the Revenue to the lender. The claimant is entitled to make a reduced payment. There were\u00a0 caps on the amount of interest that qualifies for relief.<\/p>\n<p>Formerly, relief was effectively available at the marginal rate (as an allowance reducing taxable income). There was later reduced so as to grant relief at the standard rate only. Later, relief has been granted at different rates, depending on the date of purchase and on whether the tax payer is\u00a0 first time buyer and on the number of years for which the loan existed.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Development\"><\/span>Development<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>25 percent was available to first time buyers in the first two years, reducing to 22.5 percent for the next three years and 20 percent until year 7. The rate was 15 percent for years 1 to 7 for other buyers. No relief was granted after the seventh year. The Finance Act 2010 continued relief at these levels until 2017 on qualifying loans taken out between 2004 and the end of 2011.<\/p>\n<p>The Finance Act 2010 provided that qualifying loans taken out during 2012 would be entitled to relief at 15 percent for first time buyers and 10 percent for non-first-time buyers for the years 2012 to 2017. The ceiling for interest is \u20ac6,000 per annum for married or widowed persons and \u20ac3,000 for others.\u00a0 Loans taken out after 1st January 2013 did not qualify for mortgage interest relief under Finance act 2010, with relief abolished in 2018.<\/p>\n<p>In 2011 relief was granted, subject to limits based on whether the person is single, widowed or married.\u00a0 A first time buyer is entitled to a maximum of \u20ac10,000 relief for single persons and \u20ac20,000 for widowed or married persons.\u00a0 Non- first time buyers were entitled to a maximum of \u20ac3,000 for single persons and \u20ac6,000 for married or widowed persons.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Bridging_Interest\"><\/span>Bridging Interest<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>There is a credit for so-called bridging loan interest.\u00a0 This applies to a loan to finance the acquisition of another property for use as a residence, during a period while the previous residence is unsold.<\/p>\n<p>Bridging loan interest paid for a period of up to 12 months from the date the loan is advanced, qualifies for relief, subject to the restrictions above,\u00a0 as if no other interest was paid in that period.<\/p>\n<p>Relief may still be claimed for the interest on the existing mortgage loan on the previous property, until sold. If a new mortgage is taken out within 12 months, interest for the balance of the 12 month period is treated as bridging interest for that period.\u00a0 The relief is available for a 12 month period. Where it straddles two periods, relief is apportioned.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Relief_at_Source\"><\/span>Relief at Source<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Latterly, Mortgage interest relief is operated by way of tax relief at source. This reduces the payments of persons qualifying for it. Interest must be paid to a bank or similar institution.<\/p>\n<p>The Revenue paid the allowance to the \u00a0financial institution. It must relate to a loan taken out to purchase, repair, develop or improve a residential premises within Ireland or the UK. It must be the sole or main residence of the taxpayer or spouse or his \u00a0present and former spouse or dependent relatives.<\/p>\n<ul>\n<li>\u20ac3,000\u00a0\u00a0 &#8211; \u00a0single persons<\/li>\n<li>\u20ac6,000 &#8211; married and widowed persons<\/li>\n<\/ul>\n<p>In the first seven years, the entitlements increased to \u20ac10000 and \u20ac20,000.\u00a0 The relief has been given as rates between 15 and 20% depending on a number of years since the loan was taken out .<\/p>\n<p>The relief is given at lower 25% of interest paid or\u00a0 capped \u00a0interest up to 15% by year.\u00a0 The relief is available at rates and 25 to 15% . No first-time buyers to relief is 15% of interest paid so that a maximum relief \u20ac900 i.e. \u20ac6,000 .<\/p>\n<p>In the case first-time buyers.\u00a0 The relief is up to 25% of 20,000 i.e. \u20ac5,000 lower of 5000 or 25% or 25%of interest paid; \u20ac10000 single person 20,000 for married persons<\/p>\n<p>Relief for residents outside the State does not operate by deduction at source. For those other than first-time buyers, relief is at 15% of interest paid. For first-time buyers, it is\u00a0 25% in year one, reducing to 15% in year eight. The relief applies only to the interest element of the payment and not the capital repayments.<\/p>\n<p>The relief applies so as to reduce mortgage repayments. Tax relief is not available in the seventh or eighth \u00a0year of a loan .<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Finance_Act_2012\"><\/span>Finance Act 2012<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Prior to FA 2012 Mortgage interest relief had existed for first time buyers for seven years after purchase.\u00a0 Non- first time buyers who took\u00a0 loans in 2012 were subject to reduced relief.<\/p>\n<p>They were subject both to a lower rate of relief and to more\u00a0 restrictive caps, \u20ac6,000 for married persons, \u20ac3,000 for unmarried persons.\u00a0 First time buyers were entitled to a cap of up to \u20ac20,000\u00a0 for married persons with \u20ac10,000 unmarried, with higher rate reduction.<\/p>\n<p>FA 2012\u00a0 provided for a new rate of mortgage interest relief of 30 per cent in respect of qualifying interest paid by those who took out a qualifying loan to purchase their first principal private residence in the period 2004 to 2008 (both years inclusive). It provided for the extension of the rates and ceilings of relief that apply to those who took out a qualifying loan during\u00a0 the period 1 January 2004 to 31 December 2011..<\/p>\n<h3><span class=\"ez-toc-section\" id=\"2017_Extension\"><\/span>2017 Extension<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Finance Act 2017 provides for an \u00a0extension of mortgage interest relief for existing recipients, up to 2020. Qualifying relief was restricted to 75 percent for 2018, 50 percent for 2019 and 25 percent for 2020 of the interest paid on the qualifying loan.<\/p>\n<p>The ceilings on qualifying interest were also reduced to 75 percent 2018, 50 percent 2019, and \u00a025 percent 2020 of the interest savings that applied to the end of 2017.<\/p>\n<!--themify_builder_content-->\n<div id=\"themify_builder_content-11191\" data-postid=\"11191\" class=\"themify_builder_content themify_builder_content-11191 themify_builder tf_clear\">\n    <\/div>\n<!--\/themify_builder_content-->\n","protected":false},"excerpt":{"rendered":"<p>Mortgage Interest Relief Mortgage interest was available in respect of interest paid on a qualifying loan to an Irish financial institution, where the loan was taken out to purchase, repair or develop a residential house, which is the main or sole residence of the claimant, his spouse or former spouse or a dependent relative. It [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[334],"tags":[],"_links":{"self":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/11191"}],"collection":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/comments?post=11191"}],"version-history":[{"count":3,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/11191\/revisions"}],"predecessor-version":[{"id":11349,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/11191\/revisions\/11349"}],"wp:attachment":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/media?parent=11191"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/categories?post=11191"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/tags?post=11191"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}