Mortgage interest relief is it gone?

spooky donkey

According to RTE web site " Mortgage interest relief will now only be available for the first seven years on principal private residences."

Does this mean that every one in their house over 7 years is looking this or are they giving 7 years from now.
To me it looks like I am about to loose my Mortage relief.

Does any know know what the story is here?

brian_rbk

from the irish times website:

Anyone who has been receiving interest relief for the past seven years will no longer be eligible after May 1st.

rapture 3

like a candle in the wind

Hooch

Crazy.

Cant we just pack up the whole cabinet into a little rubber dingy and send them out to sea with a banana each.
That'll save a couple of million each year.

Salome

I'm just about to take out a mortgage - does this mean that I'll get 7 years mortage relief?

niceirishfella

Salome wrote: »

I'm just about to take out a mortgage - does this mean that I'll get 7 years mortage relief?

no, cos thery have plans to abolish it altogether......you'd be well dvised to ensure you hav the ability to py the increased monthly payments ahead........anyways, you're simply mad to buy now......you'll regret it as this meausre the gov introduced today will suppress a market already fcuked.

Zzippy

niceirishfella wrote: »

no, cos thery have plans to abolish it altogether......you'd be well dvised to ensure you hav the ability to py the increased monthly payments ahead........anyways, you're simply mad to buy now......you'll regret it as this meausre the gov introduced today will suppress a market already fcuked.

Maybe he/she is building and not buying, still need a mortgage but don't pay over the odds...

dolliemix

niceirishfella wrote: »

no, cos thery have plans to abolish it altogether......you'd be well dvised to ensure you hav the ability to py the increased monthly payments ahead........anyways, you're simply mad to buy now......you'll regret it as this meausre the gov introduced today will suppress a market already fcuked.

how do you know they're planning to abolish it altogether?

My understanding, Salome, is that everyone will still receive mortgage relief for seven years, from the date of purchase.

omahaid

And what I read it is 7 years from when the mortgage is taken out. Does this mean I can sell my house, pay the mortgage, buy another house with a new mortgage and have 7 years of interest relief?

dolliemix

omahaid wrote: »

And what I read it is 7 years from when the mortgage is taken out. Does this mean I can sell my house, pay the mortgage, buy another house with a new mortgage and have 7 years of interest relief?

I hope not!!

Tippex

knowing the shower of pillocks in the Dail they wont have thought about the ins and outs of it.

niceirishfella

dolliemix wrote: »

how do you know they're planning to abolish it altogether?

My understanding, Salome, is that everyone will still receive mortgage relief for seven years, from the date of purchase.

Wrong.
And they are going to phase it out.

spooky donkey

Well Ive spoken to 2 friends in work and one thinks it will be a lot extra I will have to pay and another thinks it will not be a lot.
A guy I asked who knows the ins and outs of the property market said it goes down from 25% to 15% over those 7 years and that I would be at the bottom end of that scale being 9 years in my house, so I will see little difference. I hope he is right.

omahaid

spooky donkey wrote: »

Well Ive spoken to 2 friends in work and one thinks it will be a lot extra I will have to pay and another thinks it will not be a lot.
A guy I asked who knows the ins and outs of the property market said it goes down from 25% to 15% over those 7 years and that I would be at the bottom end of that scale being 9 years in my house, so I will see little difference. I hope he is right.

I'm in the same boat, and he's right, I was reading over the stuff I get and it does decrease for first time buyers over 8 years so I'm on the lowest now. Plus, that long ago house prices weren't too bad so....

BroomBurner

Am I the only one who thought it was only for seven years anyway? At least it went up in the last budget! Enjoy it while it lasts!

Butternutz

Hi all i have had my mortgage for 3 years and im considering to move it does this mean that i will lose my ability to receive the mortgage relief or will it carry on ???????

MickDundee

Butternutz
Hi all i have had my mortgage for 3 years and im considering to move it does this mean that i will lose my ability to receive the mortgage relief or will it carry on ???????

No, you will not lose it - the Mortgage Intertest Relief applies to you not your mortgage.

Say you took out your first mortgage in 2006, you are in Year 4 of you relief (22.5% on the Interest paid - up to €10,000 single - €20,000 married).

It doesn't matter how many times you buy and sell your home over the 7 years, you are still considered a First Time Buyer.

dvpower

Can anyone parse out this scenario.

A single person buys his first house 10 years ago and receives mortgage interest relief. He gets married two years ago, sells the house and buys a new house jointly with his partner. The partner hasn't had a mortgage before.

So, now that the relief is gone after 7 years, will this couple lose it, lose half of it, or keep it (for up to five more years)?

MickDundee

Dvpower,

Assuming you and your wife married in 2007 and applied for a mortgage together - she would have been classed as a First Time Buyer then and if you took out your first mortgage in 1999 you would have been classed as a Non FTB.

In 2009 your wife is in Year 3 of her relief (22.5%) you being a Non FTB get 15% (on interest paid up to €13,000).

After July you won't receive any more relief on the Interest you pay, but your wife will get 22.5% relief on the half of the Interest she's pays (up to €10,000)

Quack13

Ok, so lets say I get a mortgage within the next month...I will still get mortgage interest relief right?
Well at least until they abolish it.

Saruman

As a previous poster said, I thought it was only for first time buyers and only for 7 years anyway?

I got my house in 2005, I did not get the interest relief automatically so I applied on-line and I get money into my bank account each month.

Fingleberries

omahaid wrote: »

And what I read it is 7 years from when the mortgage is taken out. Does this mean I can sell my house, pay the mortgage, buy another house with a new mortgage and have 7 years of interest relief?

From what I read on the Revenue web site:

• If you have a mortgage starting in 2001 / 2002, then from May 1 you will no longer receive Mortgage Interest Relief
• If you have a mortgage for less than seven years, then you will receive interest relief for the remainder of the seven years then it will stop.
• If you have an existing mortgage, then switch lenders. The interest relief is only provided on the remaining amount of the initial 7 years.
• If you remortgage your property (to consolidate loans, build an extension, etc) then your 7 years relief starts again.

http://www.revenue.ie/en/press/budget/2009/supplementary/mortgage-interest-relief.html

To me that's a bit silly to say the least - it'll depress the existing market, because people will not be willing to pay the (overinflated) asking prices for properties because they'll be screwed seven years down the road. And to me it looks like the government are rewarding people who would continuously remortgage their property and thereby perpetuating the cycle of debt that is at the heart of the global situation.

Or do I have this completely wrong?

astrofool

If either buyer is not an FTB, then first time buyers interest relief does not apply to either.

If you buy/sell a house, you lose your FTB status also, and the increased level of relief.

Saruman

Oh wait are there two interest relief systems? A normal one and a first time buyers extra one?

faceman

I thought I understood this TRS stuff until yesterday. Lenihan sent confusing messages.

Im going to ring the revenue today and ask them.

fricatus

Echoing BroomBurner and Saruman above, I thought it was only for 7 years anyway! That was my understanding in 2006 when I bought my house - that the scheme was there to get FTBs over the first few difficult years.

A few weeks ago I was checking the rates and found the information in point 8 of this document: http://www.revenue.ie/en/tax/it/leaflets/tax-relief-source-mortgage-interest-relief.html

That reinforced (or confirmed?) my understanding that TRS applied for 7 years in all cases.

On what basis have people been receiving TRS beyond year 7 up to now?

xt40

nice guy always wrote: »

Crazy.

Cant we just pack up the whole cabinet into a little rubber dingy and send them out to sea with a banana each.
That'll save a couple of million each year.

or just stick the lot of them (and their families so we dont get their offspring ru(i)nning the place in 20 years) up against a wall and shoot the lot of them. itll never happen of course as we would need a spare wall that noone was using or at least someone who could build one.

faceman

there is an 18 minute wait time to speak to someone in the revenue! :eek:

jonski

Sorry , in way over my head here , friend just phoned me and asked .

200,000 euro morgage , 10 years ago , morgage interest going on the 1st of may . About how much worse off will he be in euros per month ??

astrofool

jonski wrote: »

Sorry , in way over my head here , friend just phoned me and asked .

200,000 euro morgage , 10 years ago , morgage interest going on the 1st of may . About how much worse off will he be in euros per month ??

What is left of the principal and what is the interest rate they are paying?

In your account, you should see TRS (mortgage interest relief) get put into the account before the mortgage payment comes out. The money put into the account is the amount he will be worse off by.

Lpfsox

wouldn't that depend on the rate of interest, and the type of mortgage being paid? How much of what's left is interest and how much is capital? Maybe (and I'm not trying to be smart here at all) his broker would be the best person to ask?

jonski

He was just looking for a rough estimate .

The Minstrel

On the subject of Mortgage interest relief, I thought Lenihan said something about protecting those who bought at the height of the prices. Are there exceptions to the 7 year rule?

mairead_or

As FTB about to sign for her new abode I'll be happy to get it for a year or 2...personally think it'd be pretty crazy to get a mortgage based on your ability to pay after the interest relief is taken off!!!

Quartet

Ref First Time Buyers Mortgage Relief vs Non First time Buyers

Remember the situation has changed now with FTB rates discontinued after 1st may...

http://www.revenue.ie/en/tax/it/leaflets/tax-relief-source-mortgage-interest-relief.html

In relation to mortgage interest relief, from 1 January 2009, the rate of tax relief for first time buyers will be increased from 20% to 25% in years 1 and 2 of the mortgage and to 22.5% in years 3, 4 and 5. This change will benefit first-time buyers who purchased since 1 January 2005.
The rate for years 6 and 7 will remain at 20%. First time buyers relief ends after year 7. The relief for non-first time buyers will be reduced from 20% to 15%.
First Time Buyer Status:

Anyone registered for Tax Relief at Source as a First Time Buyer in 2005 will benefit from the 2009 Budget changes to the TRS relief rates as 2009 will be their 5th year in this status. As a result they will receive relief at the rate of 22.5% for year 5 of FTB status, and 20% for their final two years.
Any current FTB who has been a FTB since 2004 or 2003 and is therefore entering their 6th or 7th year as a FTB will neither gain nor lose as they will continue to enjoy the FTB relief rate of 20% (as they do now) for their final years as FTBs.
Non-first time buyers and those current first time buyers who are now in their 7th year of this status will receive relief at the reduced rate of 15% from the 1st January 2009.

mollypop

astrofool wrote: »

If either buyer is not an FTB, then first time buyers interest relief does not apply to either.

If you buy/sell a house, you lose your FTB status also, and the increased level of relief.

Is this true, seems really unfair? My partner bought an apt 3 years ago, now we're buying a house together, obviously a much bigger mortgage. So he'll loose his FTB status, and I won't ever be entitled to relief as a FTB even though I never owned a property before and never paid a mortgage before??

faceman

astrofool wrote: »

If either buyer is not an FTB, then first time buyers interest relief does not apply to either.

If you buy/sell a house, you lose your FTB status also, and the increased level of relief.

Are you sure about that? Im getting conflicting information on it. According to the Revenue if you buy another house but are still within the 7 years then you carry over your interest relief status.

astrofool

mollypop wrote: »

Is this true, seems really unfair? My partner bought an apt 3 years ago, now we're buying a house together, obviously a much bigger mortgage. So he'll loose his FTB status, and I won't ever be entitled to relief as a FTB even though I never owned a property before and never paid a mortgage before??

If either partner has bought a property previously, then when you buy a property jointly, FTB status does not apply.

You'll get a lot more information on this board:
http://www.boards.ie/vbulletin/forumdisplay.php?f=38

faceman wrote:

If either buyer is not an FTB, then first time buyers interest relief does not apply to either.

If you buy/sell a house, you lose your FTB status also, and the increased level of relief.

I'm honestly not sure what the status of the interest relief is, if you buy/sell within 7 years, whether you keep your FTB interest relief period, or (now) see interest relief disappear, you are definitely not counted as an FTB for stamp duty calculations.

ejmaztec

It's par for the course that there is still loan interest relief on buy to lets, albeit restricted to 75% of the interest.

When they re-introduced interest relief on buy to lets, this in my opinion was responsible in a huge way for the property boom booming even more. So now, Pat Public is screwed with his mortgage, and it's almost business as usual for the property tycoons (the ones whose tenants haven't fecked off back to Warsaw, Vilnius, or wherever).

Sorted

I sold my home and paid off the outstanding mortgage of 80,000 in September 07. I then - rashly some would say (!) - bought a new house in October 07 and took out a new mortgage for 270,000.

My understanding is that I'll continue to get relief for 7 years from the date I took out the new mortgage.

Anyone know if this is correct???

ejmaztec

It looks like it is 7 years from the date of the new loan.


http://www.revenue.ie/en/press/budget/2009/supplementary/mortgage-interest-relief.html

This from the Revenue Commissioners site


Mortgage Interest Relief
Introduction

The Minister for Finance announced the following changes in relation to Mortgage Interest Relief in his Supplementary Budget speech on 7 April 2009.
What is being curtailed from the 1st May 2009 is the number of tax years in respect of which mortgage interest relief may be claimed – that is, such tax relief may not be claimed on the interest paid on a qualifying home loan in the 8th and subsequent tax years of the life of that loan. All qualifying loans taken out in the 2002 tax year or earlier tax years are in this category.
However, mortgage interests tax relief may be claimed on the interest paid on a qualifying home loan in the first 7 tax years of the life of that loan.

1. the rate at which tax relief is given to first-time buyers is -
   • 25 per cent for tax years 1 and 2;
   • 22.5 per cent for tax years 3, 4 and 5; and
   • 20 per cent for tax years 6 and 7, and
2. the rate at which tax relief is given to non-first-time buyers is 15%

Transitional Measure

For those mortgage holders who will no longer be entitled to mortgage interest relief as a result of this measure from 1st May 2009, relief will be allowed on a pro-rata basis for the first 4 months of 2009, that is, the portion of the relief that may already have been granted in respect of this year. This equates to a maximum relief amount for 2009 of €1,000 @ 15% for single individuals and €2,000 @ 15% married/widowed individuals.
In addition, where a new qualifying loan is taken out by such an individual between 1 May 2009 and 31 December 2009, only a proportionate amount of the annual maximum relief limit will be available in 2009 and the full annual maximum relief limit will be available for the tax years 2010 to 2015.
Example 1

Keith took out a qualifying home loan to purchase a house in 2001 for €200,000. Keith has had the benefit of tax relief on the interest paid on this loan for

• the tax years from 2001 to 2008; and
• for the period 1 January 2009 to 30 April 2009 (subject to one third of the yearly limit on interest relief for the 2009 tax year).

As he has already had the tax relief for 7 tax years, he is no longer entitled to the relief from the 1 May 2009.
Example 2

Mary, a first-time buyer takes out a qualifying home loan to purchase a house in 2006. She switches lender in 2010 in order to obtain a better interest rate. She remains entitled to the tax relief for the seven tax years 2006 – 2012 as switching mortgage provider will not affect entitlement to the tax relief. .
Example 3

John took out a qualifying home loan for €350,000 in 2001. The balance outstanding on the mortgage at 1 September 2009 is €150,000 at which stage John re-mortgages for €250,000. €150,000 of the new loan is used to pay off the existing mortgage and €100,000 is used in the building of a house extension.
In this scenario, John has had the benefit of tax relief on the interest paid on the original mortgage from 2001 until 30 April 2009 at which stage he is no longer entitled to the relief on such interest (as he has already had the tax relief for 7 tax years).
However, John is entitled to tax relief for the tax years 2009 to 2015 on the interest on that part (i.e. €100,000) of the new mortgage that is used to build the new extension.
Example 4

Adrienne, a single individual, sells her house in October 2008 and clears her existing ten year old mortgage.
In September 2009 Adrienne purchases her new residence, financed by a loan of €300,000 plus part of the proceeds of the sale of her previous home.
In this scenario, Adrienne will be entitled to tax relief on the interest paid on the new loan for the tax years 2009 to 2015 inclusive at the non-first time buyer rate of 15%.
However, the maximum amount of interest qualifying for relief is:

• 2009 - €2,000 (i.e 8/12’s of the annual €3,000 maximum from 1st May 2009)
• 2010 to 2015 - €3,000 per annum

Sorted

Thanks ejmaztec. Looks like I may be Adrienne in Example 4! Mind you, my new loan was taken out just a few weeks after paying off my old one but I don't suppose that makes a difference.

MickDundee

mollypop wrote: »

My partner bought an apt 3 years ago, now we're buying a house together, obviously a much bigger mortgage. So he'll loose his FTB status, and I won't ever be entitled to relief as a FTB even though I never owned a property before and never paid a mortgage before??

If your partner had his first mortgage 3 years ago (2006) he is still classed as a FTB (Year 4 of the Relief 22.5%). As you will be starting your first mortgage this year (2009) you are also classed as a FTB (Year 1 of the Relief 25%).

Neither of you lose your FTB status until after 7years, but because you started your mortgages at different stages you are on different rates.