Budget 2012 Mortgage Interest Relief Q + A

veryangryman

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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!!

km79

Patience2 wrote: »

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!!

In that situation would 7 year period run from date of first house purchase or second

Patience2

My understanding is that the 7 year rule is no longer relevant as we are eligible for relief at the rate of 30% until 2017. However, our ceiling will be €6000 as more than 7 years have passed since our first mortgage. Maybe thats what you mean re 7 year rule. We are currently getting relief at 15% of €6000.

pjuegos

km79 wrote: »

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

It is all very confusing. different places and different people say different things...

I honestly think that whoever bought a house within that 2004-2008 should be giving the MIR increase regardless of being now first or second time buyer. However, i dont think that the info in revenue.ie illustrates that

There is another case that does not make sense; trading down negative equity mortgages. Some people are negotiating with the banks moving to a smaller house in order to ease the mortgage repayments. however, in the case the 1st time buyer would become 2nd time buyer and will lose the MIR increase, which will be very unfair since the goal of such move it is supposed to save money to a stressed home owner...

ValOS

Hoping someone can answer this sticky one. My mortgage was approved in 2003 but as I built my own house, I drew down my mortgage in 5 stages, the last 2 stages were in 2004 and the mortgage was complete in 2004.. Does anyone know if I would be entitled to the relief on the final 2 stage payments as they took place in 2004? Many thanks

Kebab

Probably just adding to the confusion but hoping someone can help.

We drew down our first mortgage as FTBs in October 2005. We moved house 6 months later, sold the first place and bought our current house. So we were no longer FTBs. Am I right in thinking that as we are no longer FTBs, we will get the percentage increase but only for the remainder of the MIR i.e. to October 2012 (7 years from October 2005)???

Can't find a straight answer anywhere!

thanks.

Chatterboxmoira

It's all very confusing. We drew down our mortgage in April 2005 and remortgaged in March 2008 (needed a new roof!). Not sure if we still qualify as FTB's because of remortgage and switching lending companies. My lender (P TSB) sort out all the interest relief for me, so I'll just wait and see. Fingers (and everything else) crossed.

Patience2

Chatterbox and Kebab- I think both of you will be eligible. This doc sets it all out clearly and there doesn't seem to be any qualifications in relation to changing houses- http://www.finance.gov.ie/documents/publications/guidelines/MIRinfonote.pdf

It looks like you just had to have bought your first house in 04-08.

pjuegos

thanks for the link Patience2

It is the most comprensive MIR info I have seen so far

Still, it does not fully clarify whether a FTB in 2004-2008 will keep the FTB status for MIR purposes after becoming 2nd time buyer

km79

pjuegos wrote: »

thanks for the link Patience2

It is the most comprensive MIR info I have seen so far

Still, it does not fully clarify whether a FTB in 2004-2008 will keep the FTB status for MIR purposes after becoming 2nd time buyer

I double checked interest paid and interest relief received last night.
Bought in 2005 traded up in 2006
I have been receiving FTB interest relief.

pjuegos

km79 wrote: »

I double checked interest paid and interest relief received last night.
Bought in 2005 traded up in 2006
I have been receiving FTB interest relief.

thanks km79, that is a clear confirmation .
that will mean that someone that bought in 2007 and moving in 2012 will still be considered FTB. That is good news, since otherwise would not encourage people to move houses, even if they wanted to trade down to ease the mortgage repayments