Rental Property / Mortgage Interest Put Down As An Expense

ImFlyingHigh

Hi all, I'm wondering if someone can shed some light on this for me as I'm finding it difficult to get an answer on it.

In short, myself and my wife needed to remortgage our rental property in order to raise enough funds to buy our family home. At the time we did not qualify for the amount we needed due to a decrease in salary, we were short €100k. However, the apartment we own and lived in was paid for with cash in full when purchased 11 years ago. So in order to have sufficient funds to buy our PPR we took out a buy-to-let mortgage for €100k and used those funds to buy our new home which was our PPR.

Now since we took out the buy-to-let, our mortgage interest rate has skyrocketed from 3.45% to 7.45% in less than two years which is crazy, and when I told a friend about it he said just put it down as an expense as it's a rental which sounded great, but as I looked into it further, it seems like I cannot do this because the money raised from the buy to let was used to help purchase our PPR. So my question is, is this information correct and if not, is it as easy to just start including it in my tax returns as an expense? If this information is correct, can I get around it by having a HAP tenant in my buy to let, the reason why I ask is, I saw on the revenue website that landlords who take HAP payments are entitled to full mortgage interest relief. My thinking is, ok well if the PPR messes up the option to put it down as an expense, can the HAP tenant rule override the PPR rule?

Any help would be appreciated, thank you.

Allinall

No. You can’t claim it as an expense.

The loan must be used for the purchase or enhancement of the rental property.

ImFlyingHigh

https://www.boards.ie/discussion/comment/121129305#Comment_121129305

Hi, thank you for your reply.

In your opinion, would the HAP condition override this PPR condition?

Allinall

No. It won’t change anything.

ImFlyingHigh

https://www.boards.ie/discussion/comment/121129453#Comment_121129453

Thats a shame, ok thank you for your help.

3DataModem

The reality is, that the Revenue doesn't massively scrutinise the "purpose of mortgage" unless

• The person has multiple investment properties
• The person is interest-only
• You are borrowing more than you paid for the property

I am not advocating tax fraud. However the definition of "renovate" is loose enough to include de facto maintenence, furniture, etc... what I am saying is there is some wiggle room. But please pay your tax.