Mortgage Relief - How is it calculated

veryangryman

Hi there,

Ia m a single person on a modest income. I have a Mortgage of X per month, and i get Y Tax Relief on it.

I am told that it is calculated on the interest the banks charge. If so, it would mean that i get relief of around 8%

However, i read on various sites that it should be around 20% of the interest charged by the bank.. Can anybody send me on the mathematical formula?

Cheers :pac:

LillyVanilli

The best I can do for you is this:

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

IsThatSo?

Tax relief at source

http://www.revenue.ie/index.htm?/faqs/trs_relief.htm

Assuming you are a first time buyer and you already mentioned being single then you are allowed claim 20% of a max of €10k for 2008, this means that the max you can get back is €2k for 2008.

The rates for 2007 are different so check on the site.

You can apply online, its very quick apparently.

Any tax relief you are due is paid montly by your lender into the account that your mortgage dd comes out of.

unclebill98

IsThatSo? wrote: »

Tax relief at source

http://www.revenue.ie/index.htm?/faqs/trs_relief.htm

Assuming you are a first time buyer and you already mentioned being single then you are allowed claim 20% of a max of €10k for 2008, this means that the max you can get back is €2k for 2008.

The rates for 2007 are different so check on the site.

You can apply online, its very quick apparently.

Any tax relief you are due is paid montly by your lender into the account that your mortgage dd comes out of.

Or the mortgage lender simple charges you less by DD to reflect the TRS.

dubmick

^ What bank does that?

Not a very transparent way of doing business

unclebill98

dubmick wrote: »

^ What bank does that?

Not a very transparent way of doing business

UB/AIB and a few others. I see what your saying but there is no rules on how its done.

rameire

is that not why it is called tax relief at source!!!!!!
its lodged into the mortgage account every month to reduce the direct debit before it is deducted from your bank account

unclebill98

rameire wrote: »

is that not why it is called tax relief at source!!!!!!
its lodged into the mortgage account every month to reduce the direct debit before it is deducted from your bank account

Yes, its sorted by the Lender ie at source. They all just do it slightly different.

veryangryman

http://www.independent.ie/breaking-news/national-news/politics/budget-2008-increase-in-level-of-mortgage-relief-1238926.html

Word on the street is that this increase will be backdated. Which is trés cool for me cos will mean a payday of €750-ish based on a Mortgage opened in September 2007 :cool:

Anyone confirm?

dubmick

unclebill98 wrote: »

UB/AIB and a few others. I see what your saying but there is no rules on how its done.

I am with AIB and get trs lodged into my account.

rameire

veryangryman wrote: »

http://www.independent.ie/breaking-news/national-news/politics/budget-2008-increase-in-level-of-mortgage-relief-1238926.html

Word on the street is that this increase will be backdated. Which is trés cool for me cos will mean a payday of €750-ish based on a Mortgage opened in September 2007 :cool:

Anyone confirm?

that article is a year old.

unclebill98

dubmick wrote: »

I am with AIB and get trs lodged into my account.

So am I and its by DD is just less.

veryangryman

rameire wrote: »

that article is a year old.

Yes but nonetheless, im currently only getting 2K a year. Will this be raised to the 2.5K in January?

veryangryman

Can anyone offer an opinion?

Apologies for the bump mods, but just in case any revenue gurus are round on boards today

dotsman

veryangryman wrote: »

Can anyone offer an opinion?

Apologies for the bump mods, but just in case any revenue gurus are round on boards today

It really depends on the specifics of your loan (ie how much of the money you are repaying during the year is towards the capital and how much is towards the interest). You should be able to determine this by looking at you mortgage account online (or statements if you can't access it via online banking).

Once you know how much interest you are paying, the Section 9, Step 1B will explain the rest. P.S. There's a typo on that - Step 1B is for First Time Buyer's and not "Non First Time Buyers".