Budget 2012 Mortgage Interest Relief Q + A

Pablo Sanchez · 06-12-2011 7:58pm #1

For the life of me i cannot figure out how a particular measure in the budget will work for certain individuals and any insight would go a long way!

The minister announced that mortgage interest relief for people who bought between 2004 to 2008 will be increased to 30%.

I began my mortgage in December 2005 so tecnically my 7 years of relief finished this month (the one payment in 2005 counts as a year of tax relief).

Unless he is extending the term one can receive tax relief i cannot see how this would affect me and much less people who bought in 2004 who are well outside the 7 years now.

Its probably something simple that im overlooking but i just cant figure it out!

andreac · 06-12-2011 8:01pm

I thought they were extending mortgage relief until 2017. Does that mean even if you were to finish before then, that you can still get it??

Very confusing is right

agrif06 · 06-12-2011 8:05pm

For a mortgage taken out between 1 January 2004 and 31 December 2011, the Finance Act 2010 provides that your entitlement to relief will continue until the end of 2017.

Pablo Sanchez · 06-12-2011 8:08pm

agrif06 wrote: »

For a mortgage taken out between 1 January 2004 and 31 December 2011, the Finance Act 2010 provides that your entitlement to relief will continue until the end of 2017.

The best news i heard all day, THANK YOU!

I presume that there is no need to contact your lender/Revenue in this regard to extend it?

thereturn · 06-12-2011 8:17pm

Excuse my ignorance but couple of queries on this:
1. What was mortgage interest relief for those who bought in 2006ish
2. Roughly how much does this mean for someone like me who has mortgage with EBS of roughly €190,000

Any help with the above would be greatly appreciated.

agrif06 · 06-12-2011 8:26pm

thereturn wrote: »

Excuse my ignorance but couple of queries on this:
1. What was mortgage interest relief for those who bought in 2006ish
2. Roughly how much does this mean for someone like me who has mortgage with EBS of roughly €190,000

Any help with the above would be greatly appreciated.

You can calculate it here:

http://www.mortgages.ie/index.cfm/spKey/first_time_buyers.tax_relief_calculator.html

thereturn · 06-12-2011 8:45pm

Thanks for that. Appreciate it.

ronan45 · 06-12-2011 9:17pm

anyone know when it will kick in?

rameire · 06-12-2011 9:24pm

jan 1 2012

flanzer · 06-12-2011 9:25pm

What about the diminishing scale over 7 years? Is it now 30% every year until the end of 2017 if you bought within the qualifying years?

JaneyMacker · 06-12-2011 9:28pm

flanzer wrote: »

What about the diminishing scale over 7 years? Is it now 30% every year until the end of 2017 if you bought within the qualifying years?

I think it is 30% every year.
But is it for first time buyers only.
Very confusing.

rameire · 06-12-2011 9:33pm

im searching the revenue for more info but cannot see anything at the moment,
regarding what rate is applicable for all the remaining years up to 31/12/2017

km79 · 06-12-2011 9:58pm

Bought first house in 2005 sold bought another 2006... I qualified for the extra years last time round . Not sure about this but would be a really really welcome financial boost

rj1 · 06-12-2011 10:25pm

http://www.moneyguideireland.com/

Looks like 30% mortgage interest relief 2012-2017 for FTB 2004-2008

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 on the interest paid on the loan to purchase that property will, for the tax years 2012 to 2017, be 30%

Pablo Sanchez · 06-12-2011 10:28pm

rj1 wrote: »

http://www.moneyguideireland.com/

Looks like 30% mortgage interest relief 2012-2017 for FTB 2004-2008

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 on the interest paid on the loan to purchase that property will, for the tax years 2012 to 2017, be 30%

It also states:
The tax relief is 25% for years 1 and 2; 22.5% for years 3,4 & 5 and 20% for years 6 and 7.

So its an extra 10% relief if your currently in year 6/7.

rameire · 06-12-2011 10:36pm

Pablo Sanchez wrote: »

It also states:
The tax relief is 25% for years 1 and 2; 22.5% for years 3,4 & 5 and 20% for years 6 and 7.

So its an extra 10% relief if your currently in year 6/7.

yup
they are the old rates.
im going back up to 30% woo

Kilb28 · 06-12-2011 10:42pm

km79 wrote: »

Bought first house in 2005 sold bought another 2006... I qualified for the extra years last time round . Not sure about this but would be a really really welcome financial boost

I'm similar - bought in 2004 and traded up in 2007/2008 - am I entitled to this increase in mortage interest relief??? Sorry I'm a bit confused! ;-)

seefin · 06-12-2011 10:49pm

I bought as 1st time buyer in 2004 so 7 yrs was up Jan 2011.I dropped to a much lower mortgage interest relief this yr-had assumed id be on the 20% relief until 2017 so was major shock. Rang revenue and they said that after 7 yrs, you only get reduced rate -think it was rate that applies to non first time buyers. This wasn't made at all clear in previous budget so wonder if there are small print issues in new announcement today. Id be very surprised if I got the 30% relief now as gone past the 7 years. anyone know anything about this?

unclebill98 · 06-12-2011 11:08pm

What about non 1st time buyer who purchased during the same period? It seems a bit un fare.

cookie1977 · 06-12-2011 11:12pm

I think they get 15% bill

FirstIn · 06-12-2011 11:32pm

unclebill98 wrote: »

What about non 1st time buyer who purchased during the same period? It seems a bit un fare.

The thinking is that non 1st time buyers pre 2004 bought in at much lower prices. They then paid for their subsequently more expensive houses through large increases in values of their first homes. So they should not be straddled with the massive mortgages that first time buyers from 2004 till the bust have. Quite fair I say.

unclebill98 · 06-12-2011 11:38pm

I suppose there is going to be no happy outcome due to the mass of variations.

People also bought and traded up in that period too. It was not really till the later half of 07 before people noticed something seriously wrong.

I think I'll go read the whole thing before joining this discussion :-)

marywary · 07-12-2011 1:40am

Will we have to apply for it, do you think, or will it happen automatically?

sidcon · 07-12-2011 8:11am

I am currently buying a house with contracts being reviewed by both solicitors at the moment. My mortgage repayments are to be €453 a month and I'm a first time buyer. Am I better waiting till start of January 2012 to sign of contracts or what am I entitled to if I sign now.

Paddytheplaster · 07-12-2011 10:27am

I bought in 2005 and now in my sevent year in 2012. My mortage went up due to the relief decreasing in year 7. With the changes yesterday will I go up to 30%?

Dubsox · 07-12-2011 11:34am

seefin wrote: »

I bought as 1st time buyer in 2004 so 7 yrs was up Jan 2011.I dropped to a much lower mortgage interest relief this yr-had assumed id be on the 20% relief until 2017 so was major shock. Rang revenue and they said that after 7 yrs, you only get reduced rate -think it was rate that applies to non first time buyers. This wasn't made at all clear in previous budget so wonder if there are small print issues in new announcement today. Id be very surprised if I got the 30% relief now as gone past the 7 years. anyone know anything about this?

I'm in the same boat. It was a huge shock last year to see my interest relief cut so much. I don't think we're going to know for sure until the Finance Bill is published but I suspect that, even if our relief goes up to 30% from the current 15%, the €3,000 interest ceiling for 'non first time buyers' may remain. If this is the case then our current relief will be doubled at best. The Government would need to raise the interest ceiling back up to €10,000 for us to see any significant increase in our interest relief.

whoppoe · 07-12-2011 11:38am

well what i can see from this... http://www.moneyguideireland.com/ have a look at the exception..

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 on the interest paid on the loan to purchase that property will, for the tax years 2012 to 2017, be 30%

Correct me if im wrong but if you got a mortgage in 2004 and are probably getting 20% tax relief and you are on the 7th year.. this is now going to change to 30% until 2017.

ytennis · 07-12-2011 12:19pm

Wondering if someone can help me on this. I drew down on the mortgage on my property in Dec 2008 but first repayment did not occur until Jan 2009. Do I qualify for these budget measures? Have contaced TRS at revenue, they say their records show that tax relief pertains to period from Jan 09!

Lanshane · 07-12-2011 12:58pm

Hi,
Rang revenue today thinking I qualified for the 30% TRS announced in yesterdays budget.
We built our house, starting in December 2003. We paid the builder in stages. Our first amount for the house was taken out in December 2003, 50 grand. All the other stage payments were taken out in 2004.
The lady from Revenue informed me that the TRS for the 50 grand I got in December 2003 has ceased since 2009. That is understandable. She said that I will continue to get the 15% on the remainder borrowed from 2004 onwards until end of 2017.
I then asked her if amounts that I withdrew in 2004 qualify for the 30% TRS announced in budget and she said no,:eek:, as in 2004 I am no longer a first time buyer, even though the loan in December 2003 was for the same residence and the only residence I ever bought!

I am sure the lady is correct but just wanted to throw it out there and get a second opinion

. Big pity.

NuttKicker · 07-12-2011 1:07pm

i remortgaged in 2005-06 and was cut off mortgage relief about 2 years ago, reading through the stuff on money guide ireland http://www.moneyguideireland.com/ it looks like i would be entitled to the relief again at the 15% rate, i rang the mortgage relief office she didnt know too much, said there was no change to rates and if im entitled to it i should already have it and that it is only on the additional part of the re-mortgage not the full amount, hope she's wrong she didnt seem too sure, any 1 know if i should be entitled to it

lukester · 07-12-2011 4:53pm

I bought my house in 2005 but never applied for MIR, didn't even realise it was available :rolleyes:

Anyway, I'm applying now. Is there any reason why I shouldn't apply for the last 4 years backdated?

veryangryman · 07-12-2011 5:55pm

Continuing the complication,

Bought in 2007, so next year will be in year 6 of the 7

So year 6 (2012) ill get 30%
And year 7 (2013) ill get 30% (sofar i think thats right)

But is it true to say that i will now then get 30% for 2014-2017?

flanzer · 07-12-2011 6:00pm

lukester wrote: »

I bought my house in 2005 but never applied for MIR, didn't even realise it was available :rolleyes:

Anyway, I'm applying now. Is there any reason why I shouldn't apply for the last 4 years backdated?

I'm 99.9% sure, you'll get it all back...nice windfall!

lukester · 07-12-2011 6:32pm

flanzer wrote: »

I'm 99.9% sure, you'll get it all back...nice windfall!

True, but will I not miss out on the first 2 years though, i.e. 2005 and 2006?

guinnessdrinker · 07-12-2011 8:11pm

We signed mortgage papers with the bank at the end of 2008 but did not get first draw down until Feb 2009. Anyone know where we stand with the interest relief announcement in current budget?

rameire · 07-12-2011 10:54pm

http://www.revenue.ie/en/tax/it/reliefs/tax-relief-source-mortgage-rates.html

find the table that relates to you.
find the year of your drawdown
then find the rates and ceilings applicable for you until the end of 2017

baza1976 · 07-12-2011 11:22pm

Good thread. Hope someone can answer this for me please even though similar questions have been asked. "upgraded" to a new house in 2006... does that mean I will get 15% interest relief up to 6k for another few years?

Thanks in advance.

Davy · 07-12-2011 11:27pm

baza1976 wrote: »

Good thread. Hope someone can answer this for me please even though similar questions have been asked. "upgraded" to a new house in 2006... does that mean I will get 15% interest relief up to 6k for another few years?

Thanks in advance.

It doesn't matter if you moved once your first mortgage was taken out after jan 04

gc1971 · 08-12-2011 12:36am

rameire wrote: »

http://www.revenue.ie/en/tax/it/reliefs/tax-relief-source-mortgage-rates.html

find the table that relates to you.
find the year of your drawdown
then find the rates and ceilings applicable for you for the rest of your term

For the rest of your term??
I thought for people who bought between 2004 and 2008 it is now raised to 30% until 2017?

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 on the interest paid on the loan to purchase that property will, for the tax years 2012 to 2017, be 30%

carm · 08-12-2011 1:01am

FirstIn wrote: »

The thinking is that non 1st time buyers pre 2004 bought in at much lower prices. They then paid for their subsequently more expensive houses through large increases in values of their first homes. So they should not be straddled with the massive mortgages that first time buyers from 2004 till the bust have. Quite fair I say.

Fair you think? So if you're a multi-millionaire who bought your first property in Ireland in 2005, you're entitled to 30%. I don't see fairness there. Meanwhile you have people who may have bought during those years, who may have made little selling their house before they skyrocketed, struggling or in arrears entitled to nothing - after paying hefty and huge stamp duty. What were stamp duty rates for first time buyers in 2004-2008? Exempt?

Pure lazy politics on FGs part I'd say.

PaulKK · 08-12-2011 1:17am

carm wrote: »

Fair you think? So if you're a multi-millionaire who bought your first property in Ireland in 2005, you're entitled to 30%. I don't see fairness there. Meanwhile you have people who may have bought during those years, who may have made little selling their house before they skyrocketed, struggling or in arrears entitled to nothing - after paying hefty and huge stamp duty. What were stamp duty rates for first time buyers in 2004-2008? Exempt?

Pure lazy politics on FGs part I'd say.

Not a FG fan then eh? Don't you think a multimillionaire would have bought their house outright? You are picking and choosing circumstances. The fact is that the majority of those in negative equity are young first time buyers. Its a good policy imo, nothing lazy about it.

Patience2 · 08-12-2011 1:34am

Davy wrote: »

baza1976 wrote: »

Good thread. Hope someone can answer this for me please even though similar questions have been asked. "upgraded" to a new house in 2006... does that mean I will get 15% interest relief up to 6k for another few years?

Thanks in advance.

It doesn't matter if you moved once your first mortgage was taken out after jan 04[/Quote

I'm not sure that that is correct (that's what I'd like it to be!). If you look at the revenue website, it has now been updated and they make reference to residing in the house. Have a look and let me know what you think.

rameire · 08-12-2011 8:53am

gc1971 wrote: »

For the rest of your term??
I thought for people who bought between 2004 and 2008 it is now raised to 30% until 2017?

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 on the interest paid on the loan to purchase that property will, for the tax years 2012 to 2017, be 30%

sorry until end of 2017, i have edited my post now

JohnnyTodd · 08-12-2011 9:16am

guinnessdrinker wrote: »

We signed mortgage papers with the bank at the end of 2008 but did not get first draw down until Feb 2009. Anyone know where we stand with the interest relief announcement in current budget?

I'm in the same boat. If you drew down in 2009 you miss out in afraid. The only good thing is the huge reduction on house price we got

pjuegos · 08-12-2011 11:20am

Patience2 wrote: »

Davy wrote: »

It doesn't matter if you moved once your first mortgage was taken out after jan 04[/Quote

I'm not sure that that is correct (that's what I'd like it to be!). If you look at the revenue website, it has now been updated and they make reference to residing in the house. Have a look and let me know what you think.

I think you are right there. From revenue.ie:
"From 1st January 2012 the rate of mortgage interest relief for first time buyers who took out their first mortgage between the years 2004 to 2008 and are residing in the property increases to 30% until 2017. If you took out a loan outside of these dates the existing rules remain unchanged"

sO, it seems that if you moved houses you wont get it since you are no longer residing in the property that qualified for the MIR
It is actually quite unfair for people that want to trade-down in order to get lower mortgage repayments...

Davy · 08-12-2011 12:39pm

pjuegos wrote: »

Patience2 wrote: »

I think you are right there. From revenue.ie:
"From 1st January 2012 the rate of mortgage interest relief for first time buyers who took out their first mortgage between the years 2004 to 2008 and are residing in the property increases to 30% until 2017. If you took out a loan outside of these dates the existing rules remain unchanged"

sO, it seems that if you moved houses you wont get it since you are no longer residing in the property that qualified for the MIR
It is actually quite unfair for people that want to trade-down in order to get lower mortgage repayments...

That just means that you are an owner occupier rather than in the exact house. My understanding of it anyway

Patience2 · 08-12-2011 1:51pm

Thats true Davy, I never thought of it like that! And if you look at the Independant today about MIR it too suggests that if you changed homes in the period 2004-2008 you would get the extra relief. This is what the new leaflet on the Rev website says ( which could be interpreted as you say):

Q.2 In respect of whom does the 30% rate of tax relief mentioned in the Budget apply?

A. [FONT=Arial,Arial][FONT=Arial,Arial]The 30% rate of tax relief applies to the interest paid (subject to upper thresholds – see Q.4 below) by an individual -
(a) In the tax years 2012 to 2017 inclusive; and
[/FONT][/FONT](b) [FONT=Arial,Arial][FONT=Arial,Arial]on a loan used to acquire, in the period 2004 to 2008 (both years inclusive), his or her first principal private residence and which remains, for the relevant tax year in respect of which tax relief is claimed, his or her principal private residence. [/FONT][/FONT]
[FONT=Arial,Arial][FONT=Arial,Arial][/FONT][/FONT]
[FONT=Arial,Arial][FONT=Arial,Arial]But later says:
Q. 15 I bought my previous home in 2004 and then bought my current home in 2009 do I get an increase in mortgage interest relief arising from the Budget?
[FONT=Arial,Arial][FONT=Arial,Arial]A. No. The increased mortgage interest relief is specifically confined to those who bought a home in the period 2004-2008.

I wonder is this just excluded because the second home was bought in 2009 as opposed to 2008?

[/FONT][/FONT][/FONT][/FONT]

pjuegos · 08-12-2011 2:14pm

It still looks to me that if you bought first house A in 2004-2008, and then you moved to house B, you cannot receive MIR increase because house A is not your current residence

Ebony1 · 08-12-2011 2:25pm

What if your marital status changed since buying the house. I bought my house as a single person in December 2004 and received 15% MIR for 2011 (year 8). This 15% was just under the single ceiling of 3000 euro, so I never bothered finding out whether I would be entitled to the married ceiling of 6000 euro (I married in 2008) as it wouldn't make a difference. With MIR now going up to 30%, I'd like to know whether revenue would still consider me as a single person as the house is still in my name only or as a married person. With the increase to 30%, my relief would obviously amount to more than the single allowance of 3000 euro.

km79 · 08-12-2011 2:36pm

pjuegos wrote: »

It still looks to me that if you bought first house A in 2004-2008, and then you moved to house B, you cannot receive MIR increase because house A is not your current residence

from the indo:

Q I bought my first house in 2004 but sold and moved to a second house in 2007 which is now in negative equity. Since my first mortgage was 2004 do I fall under the 30pc tax relief?
Yes. Based on Budget 2012, you will qualify for the increase in relief from 15pc of the interest you pay to 30pc.
- charlie weston

Patience2 · 08-12-2011 2:58pm

I had read that in the Indo too. Anyway I rang Rev Commissioners and explained and was told no you are not eligible if you changed house after the purchase of your new house. I questioned the quy and he said I should ring the TRS section of Rev, which I did. She said I would be eligible once I bought first house in the relevant period and particularly given that I also bought by second house in that period. I explained to her about the rev website and she went off and checked wiyh someone. I could hear a man saying " well thats what I have been telling people"!! Anyway, she took my number and rang me back and said that I would be eligible because I bought in the relevant period. I think if I had replaced my house in 2009, I wouldn't be.

We will see!!

Budget 2012 Mortgage Interest Relief Q + A

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