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Offsetting mortgage interest against rental income

  • 09-11-2020 12:46pm
    #1
    Rebel83
    Registered Users, Registered Users 2 Posts: 107 ✭✭


    First time landlord here - hoping someone can help me understand the rules in relation to offsetting mortgage interest paid against rental income when completing a 12A tax return.

    My interpretation of the Revenue website is that you can claim between 75-100% of the interest, depending on the year the interest is paid. So for a tax return of 2019, I can offset100% of the interest paid against the rental income, is that correct? Is that correct or is it something to do with when the mortgage was taken out? Why would someone be claiming for interest paid earlier than 2019 at this stage?


Comments

  • #2
    relax carry on
    Registered Users, Registered Users 2 Posts: 4,113 ✭✭✭relax carry on


    Rebel83 wrote: »
    First time landlord here - hoping someone can help me understand the rules in relation to offsetting mortgage interest paid against rental income when completing a 12A tax return.

    My interpretation of the Revenue website is that you can claim between 75-100% of the interest, depending on the year the interest is paid. So for a tax return of 2019, I can offset100% of the interest paid against the rental income, is that correct? Is that correct or is it something to do with when the mortgage was taken out? Why would someone be claiming for interest paid earlier than 2019 at this stage?

    Your form 12 tax return relating to 2019 should only include interest in relation to the tax year 2019. In that year if you met the conditions to claim 100% of the interest as a deduction against your gross rental income then you can claim the 100%. It doesn't matter when the loan was taken out so long as you aren't also claiming TRS on it also.
    The rules relating to prior years interest amounts relate to those prior tax years and the % allowed has altered over the years. The information about the prior years is still relevant as there are some taxpayers late with their returns for prior years and believe it or not, have never filed any returns whatsoever.


  • #3
    Rebel83
    Registered Users, Registered Users 2 Posts: 107 ✭✭Rebel83


    relax carry on wrote: »
    Your from 12 tax return relating to 2019 should only include interest in relation to the tax year 2019. In that year if you met the conditions to claim 100% of the interest as a deduction against your gross rental income then you can claim the 100%. It doesn't matter when the loan was taken out so long as you aren't also claiming TRS on it also.
    The rules relating to prior years interest amounts relate to those prior tax years and the % allowed has altered over the years. The information about the prior years is still relevant as there are some taxpayers late with their returns for prior years and believe it or not, have never filed any returns whatsoever.

    Thanks for that - so I can offset 100% of my interest paid so as I am no longer in receipt of TRS on the mortgage. I was assuming/ hoping that the reason for the previous years were listed were for the reasons you've mentioned but wasn't certain.


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