TRS reduction from Jan

JuliusCaesar

Just wondering if the Tax Relief at Source was reduced in the last Budget. Mine has nearly halved, and I've no idea why.

jetski

Ring revenue and ask, a freind had the same issue... let us know how you get on

tenchi-fan

jetski wrote: »

Ring revenue and ask, a freind had the same issue... let us know how you get on

That doesn't sound right, why would they halve it? Maybe phone your bank and ask.

Senna

Any chance you took out the mortgage mid 2009 or only applied for TRS mid 2009, so in 2009 you were getting 12 months relief in 6 months. Now in 2010 the relief is spread out and your getting less relief per month?

thesteve

Senna wrote: »

Any chance you took out the mortgage mid 2009 or only applied for TRS mid 2009, so in 2009 you were getting 12 months relief in 6 months. Now in 2010 the relief is spread out and your getting less relief per month?

that's not the way it works, if take out mid year you just lose the first half of the years TRS payments. I found this out the hard way too

seamus

My TRS has dropped by more than half but that's because our fixed rate expired in December, so our actual payment is still less than it was.

Have the terms of your mortgage changed at all, and what year are you in for TRS? (i.e. are you in year 3, year 4, etc)

nouveau_4.0

My TRS has gone up since January even though my mortgage interest payments have gone down.

Any explanation for this?

godtabh

My trs was reduced by about €100

Senna

thesteve wrote: »

that's not the way it works, if take out mid year you just lose the first half of the years TRS payments. I found this out the hard way too

Yes you would lose it if your repayments are above or close to the maximum level of TRS, but if your repayments are lower, you will get more relief during those 6 months of the year than you would get starting your first full year. If you have a larger mortgage, you will not benefit fully from TRS unless it taken in the first few months, on a smaller mortgage you will only loose a small amount by taking it out mid year, but obviously taking out a mortgage later in the years means you will lose some TRS, regardless of size.

I might not have explained that correctly, but thats the way it works.

godtabh wrote: »

My trs was reduced by about €100

TRS reduces with the number of years you have the mortgage, what year are you in?

From 1st January 2009, the rate of tax relief for first time buyers 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 benefits first-time buyers who purchased since 1st January 2005.
The rate for years 6 and 7 remains at 20%. First time buyers relief ends after year 7. The relief for non first time buyers is reduced from 20% to 15%.

godtabh

I'm two and a half years into it

Senna

I think that means you are starting year 4, as it runs as a calendar year, not from when you took out the mortgage. Which means you should have no change. Maybe ring revenue.

JuliusCaesar

Senna wrote: »

Any chance you took out the mortgage mid 2009 or only applied for TRS mid 2009, so in 2009 you were getting 12 months relief in 6 months. Now in 2010 the relief is spread out and your getting less relief per month?

That would explain it! Thanks, Senna!

thesteve

If you have a larger mortgage, you will not benefit fully from TRS unless it taken in the first few months

Yup that makes sense, I drew down in October and was getting the max TRS

macuser56

Hi,

We are 6 years and 6 months into our TRS and ours has been reduced from 330 per month, and this has been reduced down to 80 per month.

Our argument is that we have not got 7 years worth of benefit.

Revenue say that 2009 was out 7th calendar year, and so full benefit ended at end of 2009:
1/ 2003
2/ 2004
3/ 2005
4/ 2006
5/ 2007
6/ 2008
7/ 2009

However here is the quote from Revenue.ie:

"With effect from 1st May 2009 the number of tax years in respect of which mortgage interest relief may be claimed is 7 years for first time and non first time buyers. You can claim mortgage tax relief in respect of the interest charged/paid on your main residence. You can also claim mortgage tax relief in respect of a mortgage paid by you for your separated/divorced spouse, and a dependent relative (i.e. widowed parent, elderly relative) for whom you are claiming a dependent relative tax credit. However, your mortgage TRS entitlement cannot exceed the maximum TRS allowance.
Switching lender or mortgage type to achieve a better interest rate does not equate to a new loan. However, moving home and taking out a new mortgage for this home with a new or existing lender is eligible for relief for 7 years from the date of first payment on the new home loan."

So reading the text- it specifically says "7 years from the date of first payment".

So are Revenue misinterpreting the rules and not paying people what they are entitled to?

D3PO

macuser56 wrote: »

Hi,

We are 6 years and 6 months into our TRS and ours has been reduced from 330 per month, and this has been reduced down to 80 per month.

Our argument is that we have not got 7 years worth of benefit.

Revenue say that 2009 was out 7th calendar year, and so full benefit ended at end of 2009:
1/ 2003
2/ 2004
3/ 2005
4/ 2006
5/ 2007
6/ 2008
7/ 2009

However here is the quote from Revenue.ie:

"With effect from 1st May 2009 the number of tax years in respect of which mortgage interest relief may be claimed is 7 years for first time and non first time buyers. You can claim mortgage tax relief in respect of the interest charged/paid on your main residence. You can also claim mortgage tax relief in respect of a mortgage paid by you for your separated/divorced spouse, and a dependent relative (i.e. widowed parent, elderly relative) for whom you are claiming a dependent relative tax credit. However, your mortgage TRS entitlement cannot exceed the maximum TRS allowance.
Switching lender or mortgage type to achieve a better interest rate does not equate to a new loan. However, moving home and taking out a new mortgage for this home with a new or existing lender is eligible for relief for 7 years from the date of first payment on the new home loan."

So reading the text- it specifically says "7 years from the date of first payment".

So are Revenue misinterpreting the rules and not paying people what they are entitled to?

i could be wrong but i thought TRS was extended for those finishing year 7 in 2009. I could swear I heard it in the budget

fletch

thesteve wrote: »

that's not the way it works, if take out mid year you just lose the first half of the years TRS payments. I found this out the hard way too

Are you sure?
http://www.revenue.ie/en/tax/it/leaflets/tax-relief-source-mortgage-interest-relief.html#section16

16. How do I claim for previous years?

The Finance Act 2003 introduced a new time limit for claiming tax repayments. From 1st January 2005 the overall time limit is being reduced from 10 years to 4 years. Claims made on or after 1st January 2005 will be subject to the 4-year time limit.

In 2009, to claim for years 2005 to 2008 (inclusive), you will need to complete a pdfClaim for Prior Year(s) Mortgage Interest Relief - TRS1P form (PDF, 169KB) and send it to: Office of the Revenue Commissioners, Collector Generals Division, TRS Section, Sarsfield House, Francis Street, Limerick (Freepost). Any claims for 2009 cannot be dealt with until 2010.

Senna

macuser56 wrote: »

So are Revenue misinterpreting the rules and not paying people what they are entitled to?

TRS has always been 7 calendar years, January to January.
If you look back at your statements you will probably find you got more relief each month in the 6 months of your first year, than the relief got in your first repayment of the next year. i.e. your full years relief was given over 6 months instead of 12 in year 1.
You probably still lost out a bit, but not completely. Its worse if you draw-down in the last 4 months of the year.

macuser56

Not according to the TRS people. I have queried this and they say it ends in 2009.

Here are two examples:

1/ If a person bought in December 2003, their relief ended on 31/12/09- receiving only 73 months of benefit.

2/ If they had bought on 1/1/04, they would have had relief until 31/12/10- 84 months of benefit.

Both cases above cover 7 *calendar* years.

Very unfair.

macuser56

Here is an example of what happened with yesterday's finance bill being released:

--
Quote from Finance Bill:
"‘Section 6 amends section 244 of the Taxes Consolidation Act, 1997
to provide that tax relief on qualifying mortgage interest paid will
continue to be available at current levels for the tax years 2010 to
2017 in respect of interest paid on qualifying home loans taken out
on or after 1 January 2004 and on or before 31 December 2011.

The section also inserts into section 244 a transitional measure of
relief that will be available in the tax years 2012 to 2017 inclusive in
respect of interest paid in those tax years on qualifying home loans
taken out during 2012. Firstly, the rate at which tax relief will be
available in respect of interest paid on these qualifying home loans
will be 15 per cent for first-time-buyers and 10 per cent for non firsttime-
buyers. Secondly, the ceiling of qualifying interest for all these
qualifying loans will be €6,000 in respect of married or widowed
persons and €3,000 for others (irrespective of whether the borrower
is a first-time-buyer or non-first-time-buyer). Loans taken out on or
after 1 January 2013 will not qualify for mortgage interest relief and
mortgage interest relief will be abolished completely for the tax year
2018 and subsequent tax years."
--

Here is an example using this info:

Example of Mortgage interest per month for non-first time buyers: 2k
Interest per year: 24k

Married couples only get benefit of max of €6k at 10%= €600
Divide this by 12 to get monthly relief
= €50pm!!!!

Is that it- is that Lenihan's plan to help people who are struggling with mortgages????

seamus

macuser56 wrote: »

Here is an example using this info:

Example of Mortgage interest per month for non-first time buyers: 2k
Interest per year: 24k

Married couples only get benefit of max of €6k at 10%= €600
Divide this by 12 to get monthly relief
= €50pm!!!!

Is that it- is that Lenihan's plan to help people who are struggling with mortgages????

You would need a mortgage of €530k over 25 years @ 4.5% to have interest repayments of €2k.

For non first-time buyers, the difference is actually only €300 per annum (€150 for a single person). At present, non-FTBs only get relief on maximum of €6k @ 15% - €75 per month.

So it's not really a big deal for them. The reason it's a help is because anyone who currently avails of TRS will continue availing of it until 2017, whereas most people's TRS would have expired before them.

macuser56

Think your figures are just wrong Seamus.

We had TRS of 333 per month from July 2003 to Dec 2009. We bought in 2003 (first time buyer) and then moved in 2008.

We lost our TRS from January 2010 as the Revenue rule we had coverage during 7 years (Jan 2003 to Dec 2009), instead of for 7 years (July 2003 to June 2010).

So after the finance bill change we now only get 50 euro a month.

The difference between the 333 and the 50 in benefit means we can't now pay our mortgage.

testicle

macuser56 wrote: »

Think your figures are just wrong Seamus.

We had TRS of 333 per month from July 2003 to Dec 2009. We bought in 2003 (first time buyer) and then moved in 2008.

We lost our TRS from January 2010 as the Revenue rule we had coverage during 7 years (Jan 2003 to Dec 2009), instead of for 7 years (July 2003 to June 2010).

So after the finance bill change we now only get 50 euro a month.

The difference between the 333 and the 50 in benefit means we can't now pay our mortgage.

Go back and read it again, carefully. Especially the highlighted bits:

Section 6 amends section 244 of the Taxes Consolidation Act, 1997
to provide that tax relief on qualifying mortgage interest paid will
continue to be available at current levels for the tax years 2010 to
2017 in respect of interest paid on qualifying home loans taken out
on or after 1 January 2004 and on or before 31 December 2011.

The section also inserts into section 244 a transitional measure of
relief that will be available in the tax years 2012 to 2017 inclusive in
respect of interest paid in those tax years on qualifying home loans
taken out during 2012. Firstly, the rate at which tax relief will be
available in respect of interest paid on these qualifying home loans
will be 15 per cent for first-time-buyers and 10 per cent for non firsttime-
buyers. Secondly, the ceiling of qualifying interest for all these
qualifying loans will be €6,000 in respect of married or widowed
persons and €3,000 for others (irrespective of whether the borrower
is a first-time-buyer or non-first-time-buyer). Loans taken out on or
after 1 January 2013 will not qualify for mortgage interest relief and
mortgage interest relief will be abolished completely for the tax year
2018 and subsequent tax years.

icbarros

I am also quite annoyed with this issue of "Calendar year" x "Mortgage month/year".

It was already mentioned in this forum that this is not fair for someone that, for example, takes a mortgage in the last months of the year.

Has anyone tried to complain to Revenue or Ombudsman about this?

I'm trying to figure out if there are enough grants for a complain because Senna was saying that we get the full benefits in the first year.

If you look back at your statements you will probably find you got more relief each month in the 6 months of your first year, than the relief got in your first repayment of the next year. i.e. your full years relief was given over 6 months instead of 12 in year 1.

Senna

icbarros wrote: »

I'm trying to figure out if there are enough grants for a complain because Senna was saying that we get the full benefits in the first year.

Have you looked at your statements, did you benefit fully or how much did you lose? No point looking to complain if you dont even know if you lost out.

Why is this an issue now? and not 6 years ago when you actually "lost" the full benefit of TRS? The "calender years" condition isn't new and wasn't hidden from you.

icbarros

Senna wrote: »

Why is this an issue now? and not 6 years ago when you actually "lost" the full benefit of TRS? The "calender years" condition isn't new and wasn't hidden from you.

No, that's not my case. I am in my 3rd year and I am already losing 6 months of TRS at 25% because my mortgage date is from June.

icbarros

Senna wrote: »

Have you looked at your statements, did you benefit fully or how much did you lose? No point looking to complain if you dont even know if you lost out.

I gave a look at my statements and in the 1st year I got TRS in relation to 6 months only (mortgage is from June), not the full calendar year, which is fine and makes sense IMO.
What doesn't make sense to me is the fact that the 3rd year is starting in January (Calendar year) and I am losing 6 months of TRS at rate 25%, since 3rd year is now 22,5%.

Senna

icbarros wrote: »

No, that's not my case. I am in my 3rd year and I am already losing 6 months of TRS at 25% because my mortgage date is from June.

Sorry was thinking you were another poster.
Could you just confirm a post i made earlier, were your payments the same amount in December of year 1 as they were in January year 2 (assuming interest rates were unchanged)?

icbarros

Senna wrote: »

Could you just confirm a post i made earlier, were your payments the same amount in December of year 1 as they were in January year 2 (assuming interest rates were unchanged)?

No, they were not the same, it was reduced in January but the interest rates changed as well.

Looking at the 2009 statement the TRS was correct.

It is just on the 3rd year and because the TRS is reduced to 22,5% (1st and 2nd year were 25%) that the "calendar year" has an impact, because they start crediting 22,5% in January when they should do it only in June (the month the mortgage was taken and the month they started paying TRS initially).

testicle

If I'm renting for 6 months of this year, and then buy a house, can I claim Rent Relief and TRS for this year?.

MonkeyDoo

Didnt get any trs payment this Jan! Only in 3rd year of mortgage...what are Revenue at...

thesteve

Happened to someone else I know too, I thought it was extended 7 years last year?

Senna

They make mistakes on peoples TRS every January, best call revenue and get them to fix it.