Mortgage Interest Relief - Budget

RA girl · 06-12-2011 8:41pm #1

Hi,
I'm totally confused by the mortgage interest relief change in the latest budget and need a bit of help please?
We were first time buyers in 2005 and are crippled with a big mortgage...we thought that the mortgage interest relief would be finished next year but just heard that there is an increase to 30% relief now for homes bought between 2004-2008.
Does this mean that it will be extended after the 7 years or is there some other mechanism for getting the MIR....they'd hardly only give it to you for a year would they?
I really don't know what to think and am probably getting it all wrong anyway so if anybody can help me out I'd appreciate it.

Thanks in advance

PS. My name is from a previous thread about a long term illness and has absolutely no political meaning whatsoever...I will change the name

Citizenpain · 06-12-2011 8:54pm

think it was extended to 2017 last year

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

newmug · 06-12-2011 8:55pm

Yea I'm confused too! Can somebody explain all this?

Citizenpain · 06-12-2011 9:00pm

http://www.askaboutmoney.com/showthread.php?t=163715

BlackEdelweiss · 06-12-2011 9:08pm

We signed our mortgage on the 19th december 2003 but did not begin paying till 2004, we got our keys in January. Do we qualify for this or have we just missed out?

Citizenpain · 06-12-2011 9:12pm

i would guess that you just miss out---but we'll need to wait for the detail

irishguy · 06-12-2011 9:16pm

BlackEdelweiss wrote: »

We signed our mortgage on the 19th december 2003 but did not begin paying till 2004, we got our keys in January. Do we qualify for this or have we just missed out?

Its based on the date of your first payment. So you will get it.

Citizenpain · 06-12-2011 9:20pm

irishguy wrote: »

Its based on the date of your first payment. So you will get it.

have you a source for this? I know MIR is but the speech today was not worded this way

for instance someone that bought in dec 2008 and drew down mortgage in 2008 ---first interest payment is Jan 2009 and will have some interest from dec 2008 -- are you saying they will not qualify?

irishguy · 06-12-2011 9:31pm

Citizenpain wrote: »

have you a source for this? I know MIR is but the speech today was not worded this way

for instance someone that bought in dec 2008 and drew down mortgage in 2008 ---first interest payment is Jan 2009 and will have some interest from dec 2008 -- are you saying they will not qualify?

Sorry the MIR is based on the first payment. I would assume they would use the same date as its easy for them to get a its fairly accurate.

Kilb28 · 06-12-2011 9:35pm

I'm confused too. We bought our house too in 2004 (first time buyers) then in 2008 we sold our house and bought a new one continuing our mortgage interest relief. I'm guessing we don't apply to this increase but I'm hoping I'm wrong as surprise surprise we are in negative equity! Would anyone know???

lagoon · 06-12-2011 9:48pm

Minister Noonan announced an increase to 25% mortgage interest relief for first time buyers and 15% for non-first time buyers in 2012.
Guess what, that exactly the same as it was in 2011 !!!
All thats has happened is the government has rowed back on the planned reduction to 15% and 10% respectively.
In fact mortgage interest relief was to be abolished in June 2011, then it was December 2011, now its extended to Dec. 2012. That all it is , an extension and I would bet now that they will extend it again next year for 2013
Why did the Minister dress this up as an increase in relief when it is the same as 2011.

Mr. Noonan my eyes are wide open.

William Gates · 06-12-2011 11:14pm

I bought my house in 2005 so am entering my 7th year of my mortgage.

Am I right in saying that my mortgage interest relief will now go from 20% to 30% for the 7th year?

I'm a bit confused about what happens to the Mortgage Interest relief to 31/12/2017..............does this go up to 30% as well now or does it stay at 15%?

Citizenpain · 07-12-2011 12:17am

from revenue website

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%.

William Gates · 07-12-2011 12:19am

Citizenpain wrote: »

from revenue website

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%.

Well that's just top quality! Cheers Citizenpain.

Citizenpain · 07-12-2011 12:21am

William Gates wrote: »

Well that's just top quality! Cheers Citizenpain.

mines a pint

az2wp0sye65487 · 07-12-2011 9:19am

Citizenpain wrote: »

from revenue website

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%.

So it includes all of 2008 - right up until 31st Dec? - Thanks, I was just coming in here to clarify that as it doesn't say in the budget financial statement online!

We bought in August 2008 so hopefully this will help us out... Although we'll only end up paying that money out elsewhere with the petrol & VAT increases!! So I'm probably no better off really! Hopefully no worse off either though!

RA girl · 07-12-2011 9:36am

Thanks so much for all the replies.

But can anyone just clarify one thing for me. We bought in 2005 and as far as I was concerned our relief was coming to an end mid 2012 i.e. the seven years we were told we'd have it.

So am i right in understanding that we will continue to get it until 2017?

bamboozle · 07-12-2011 10:36am

RA girl wrote: »

Thanks so much for all the replies.

But can anyone just clarify one thing for me. We bought in 2005 and as far as I was concerned our relief was coming to an end mid 2012 i.e. the seven years we were told we'd have it.

So am i right in understanding that we will continue to get it until 2017?

correct, refer to post 13 of the thread.

Dubsox · 07-12-2011 10:49am

Sorry to throw a spanner in the works but the main problem for those who are in year eight or about to go into year eight is not so much that the rate drops to €15% but that the ceiling for claiming interest relief is lowered to €3,000 (for a single person). This means that the maximum relief you can claim is €450 (15% of €3,000) over the year or €37.50 per month. If this is now increased to 30% and the ceiling remains the same, then the most that you can claim in relief will be 30% of €3,000 or €75 per month. The ideal result would be if the interest ceiling were restored to the €10,000 limit that was available in years 1 to 7. In this scenario, you would be entitled to claim 30% relief on all of your mortgage interest up to €10,000.

donalg1 · 07-12-2011 10:56am

From the Revenue website

First time buyers

Tax relief is still 25% for years 1 & 2, 22.5% years 3, 4, and 5 and then 20% for the final two years. After 7 years the rates and thresholds for relief are as for non-first time buyers.

Non-First time buyers

Tax relief is 15%

So from this I would take it to mean that you have the normal first-time buyer rate for seven years and then after that you get the rate of 15% until 2017 when it ceases.

However, there is now an exception.

Exception

For individuals who purchased their home on or after 1 January 2004 and on or before the 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%.

So I assume those people that bought between those dates will have been getting 15% up to 2017 anyway once their initial seven years was up, and will now instead get 30% until 2017 after the initial seven years.

km79 · 07-12-2011 11:43am

bought 1st house in 2005 traded up in 2006.
i got the benefit of extended term last time around i.e. FTB till 2017 so im wondering will I qualify for this increase.
as always the devil will be in the detail will it be 30% of 10000 or 30% of 3000....

Dodge · 07-12-2011 12:21pm

donalg1 wrote: »

So I assume those people that bought between those dates will have been getting 15% up to 2017 anyway once their initial seven years was up, and will now instead get 30% until 2017 after the initial seven years.

Thats my reading of it. However the threshold for interest relilef for years 1-7 is €10,000 (single)/€20,000 (married), while after that the threshold is €3,000/€6,000

So while the rate of relief rises, your monthly mortgage payment will too (albeit at less than it would've anyway)

T Dog · 07-12-2011 2:27pm

Can someone tell me if the new interest relief rate will apply to first time buyers who built their house rather than bought their house.

JohnnyTodd · 07-12-2011 2:29pm

I purchased a house in Feb 2008. We were supposed to move in in October 2008. The house was not ready and we didnt get in until May 2009.

Hence mortgage wasnt drawn down until May 2009. Do we qualify for Mortgage relief?

aligator_am · 07-12-2011 10:59pm

Tegan Narrow Web wrote: »

So it includes all of 2008 - right up until 31st Dec? - Thanks, I was just coming in here to clarify that as it doesn't say in the budget financial statement online!

We bought in August 2008 so hopefully this will help us out... Although we'll only end up paying that money out elsewhere with the petrol & VAT increases!! So I'm probably no better off really! Hopefully no worse off either though!

I'm hoping someone can clarify this for me, we signed the contract for the house in November 2008 but didn't move in until February 2009, first mortgage repayment wasn't until March 2009.

Will we qualify for this or is it based on when the first payment was made?

Also, will this be applied automatically or is it something that needs to be chased up on from our end? sorry for all the questions, I'm a bit dense when it comes to this stuff.

Thanks in advance
Al

beanok77 · 08-12-2011 9:11pm

Citizenpain wrote: »

from revenue website

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%.

Well this link pretty much messes up your theory! And I am not happy about it. I handed over a €25,000 deposit for my house in early december 08. My mortgage did not draw down till March 09. How unfair is that?

http://www.citizensinformation.ie/en/housing/owning_a_home/buying_a_home/mortgage_interest_relief.html

beanok77 · 08-12-2011 9:15pm

Citizenpain wrote: »

mines a pint

And you can shove your pint up your you know what. Where on the revenue website does it say that? In fact it pretty much says the opposite!

See section 3!

http://www.revenue.ie/en/tax/it/leaflets/tax-relief-source-mortgage-interest-relief.html#section3

Citizenpain · 08-12-2011 9:16pm

beanok77 wrote: »

Well this link pretty much messes up your theory! And I am not happy about it. I handed over a €25,000 deposit for my house in early december 08. My mortgage did not draw down till March 09. How unfair is that?

http://www.citizensinformation.ie/en/housing/owning_a_home/buying_a_home/mortgage_interest_relief.html

to be fair.... it wasnt my theory - i just copied and pasted....

www.revenue.ie now says

Section 3. What changes have arisen from the Budget Announcement on 6th December 2011 [Budget 2012]
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.

Citizenpain · 08-12-2011 9:23pm

beanok77 wrote: »

And you can shove your pint up your you know what. Where on the revenue website does it say that? In fact it pretty much says the opposite!

See section 3!

http://www.revenue.ie/en/tax/it/leaflets/tax-relief-source-mortgage-interest-relief.html#section3

here

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

see exemption.

BlackEdelweiss · 11-12-2011 10:50pm

I have read the things quoted here from citizens advice etc but I am still not clear what it means for people like me who signed the deal in 2003 but dident pay till 2004 and those at the other end of the spectrum who signed in 2008 but did not pay till 2009.
"Your entitlement to mortgage interest relief depends on the start date of your mortgage repayments, as follows:

If you started paying the mortgage in 2003 or earlier, your entitlement expired in 2009.
For a mortgage taken out between 1 January 2004 and 31 December 2012, your entitlement to relief will continue until the end of 2017.
If you are a first-time buyer who started paying the mortgage between 1 January 2004 and 31 December 2008, Budget 2012 provides for a special rate of mortgage interest relief of 30% for the tax years 2012 to 2017."

The first line says if you "started paying your mortgage in 2003" which I did not.
The second line says "for a mortgage taken out between 1 January 2004", mine was taken out in 2003.
Is there a clear definition yet?

JohnnyTodd · 12-12-2011 10:16am

BlackEdelweiss wrote: »

I have read the things quoted here from citizens advice etc but I am still not clear what it means for people like me who signed the deal in 2003 but dident pay till 2004 and those at the other end of the spectrum who signed in 2008 but did not pay till 2009.
"Your entitlement to mortgage interest relief depends on the start date of your mortgage repayments, as follows:

If you started paying the mortgage in 2003 or earlier, your entitlement expired in 2009.
For a mortgage taken out between 1 January 2004 and 31 December 2012, your entitlement to relief will continue until the end of 2017.
If you are a first-time buyer who started paying the mortgage between 1 January 2004 and 31 December 2008, Budget 2012 provides for a special rate of mortgage interest relief of 30% for the tax years 2012 to 2017."

The first line says if you "started paying your mortgage in 2003" which I did not.
The second line says "for a mortgage taken out between 1 January 2004", mine was taken out in 2003.
Is there a clear definition yet?

You bought before the boom. You were one of the lucky ones. You shouldnt have anymore tax relief imo

Dodge · 12-12-2011 11:09am

JohnnyTodd wrote: »

You bought before the boom. You were one of the lucky ones. You shouldnt have anymore tax relief imo

Houses weren't cheap in 2003 and 2004. It was then that the exodus to cummuter land happened, as Dublin became too expensive

JohnnyTodd · 12-12-2011 11:13am

Dodge wrote: »

Houses weren't cheap in 2003 and 2004. It was then that the exodus to cummuter land happened, as Dublin became too expensive

Not cheap for sure but I think you'll find you paid considerly less than the mug who bought in 2009.

That mug is me

Dodge · 12-12-2011 11:56am

JohnnyTodd wrote: »

Not cheap for sure but I think you'll find you paid considerly less than the mug who bought in 2009.

That mug is me

I'm not into point scoring, but the 2003/2004 guy could argue that prices started to drop significantly in 2008 and in 2009 were roughly the same as 2003

http://www.cso.ie/px/doehlg/Dialog/varval.asp?ma=HSQ06&ti=Average+Price+of+Houses+by+Quarter,+Statistic+and+Area&path=../Database/DoEHLG/Housing%20Statistics/&lang=1

Obviously not everyone is the same, but I think your ire at the poster is misplaced

JohnnyTodd · 12-12-2011 11:59am

Dodge wrote: »

I'm not into point scoring, but the 2003/2004 guy could argue that prices started to drop significantly in 2008 and in 2009 were roughly the same as 2003

http://www.cso.ie/px/doehlg/Dialog/varval.asp?ma=HSQ06&ti=Average+Price+of+Houses+by+Quarter,+Statistic+and+Area&path=../Database/DoEHLG/Housing%20Statistics/&lang=1

Obviously not everyone is the same, but I think your ire at the poster is misplaced

I bought a house in 2002 for 80k. Its costs me 300+ plus to mortgage it. I bought my home house in 2009. It cost 195K ( managed to get a 65K discount) My mortgage is 800 a month.

I think your figures are incorrect

Dodge · 12-12-2011 1:47pm

They're not my figures, they are the CSO's figures

And no one mentioned 2002...

BlackEdelweiss · 12-12-2011 6:05pm

JohnnyTodd wrote: »

I bought a house in 2002 for 80k. Its costs me 300+ plus to mortgage it. I bought my home house in 2009. It cost 195K ( managed to get a 65K discount) My mortgage is 800 a month.

I think your figures are incorrect

My mortgage is €850 a month so does that mean I deserve it more than you? I live in a 3 bed semi by the way.

Ludikrus · 20-03-2012 4:48pm

Citizenpain wrote: »

from revenue website

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%.

I fall into the qualifying category but the interest relief payment I get every month has not increased yet. My mortgage is with Bank of Ireland. Does anyone know when we are supposed to get this increase? Will it be back-dated?
Thanks for any info.

irishguy · 20-03-2012 4:50pm

Ludikrus wrote: »

I fall into the qualifying category but the interest relief payment I get every month has not increased yet. My mortgage is with Bank of Ireland. Does anyone know when we are supposed to get this increase? Will it be back-dated?
Thanks for any info.

During the Summer and yes you will. There was an article on it in the SBP last weekend.

Mortgage Interest Relief - Budget

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