Click Here to Request a Callback

When: Oct 8, 12
Where: Current Affairs, News, Uncategorized
Who: Staff
With: No Comments »

If you are considering buying a new home, topping up your mortgage for home improvements or re-mortgaging then you should consider doing so in advance of 31st December 2012.  That is the cut-off date after which mortgage interest relief will no longer be available.  In other words, mortgages, top-ups or re-mortgages obtained after 31st December 2012 will not qualify for the relief.

Mortgage interest relief is a tax relief given to mortgage holders based on the interest paid on their mortgage.  In order to qualify for the relief the mortgage must be a new mortgage for a home, a top up loan for the purposes of developing or improving your home or  a re-mortgage.  A mortgage taken out from 1st January 2004 to 31st December 2012 to purchase, repair, develop or improve your sole or main residence is eligible for mortgage interest relief.  The amount of mortgage interest relief payable depends on whether you are a first time buyer or non first time buyer and whether you are married/in civil partnership or unmarried/not in a civil partnership.  The thresholds are set out on www.revenue.ie.

The relief lasts for seven years and is currently at a rate of 25% for first time buyers for the first two years; 22.5% in years three, four and five; and 20% in years six and seven. For non first time buyers the rate is 15%.  The relief is paid into your bank account.  You do not need to be earning a taxable income to qualify for mortgage interest relief.

If you take out a qualifying loan as a first time buyer in 2012, you will now receive relief at a rate of 25% on ceilings of €10,000 per year if you are single and €20,000 per year if you are married or in a civil partnership.  This will give a maximum relief in 2012 of €2,500 for single people and €5,000 for married people/civil partners.

Non first time buyers who take out a qualifying loan in 2012, will continue to receive relief at a rate of 15% on ceilings of €3,000 for single individuals and €6,000 for married couples/civil partners.  This will give a maximum relief in 2012 of €450.00 for single people and €900 for married couples/civil partners.

There is some good news for hard pressed home owners who bought their home between 2004 and 2008.  An increased rate of mortgage interest relief of 30% is now available if you bought your first home as your sole or main residence between 1st January 2004 and 31st December 2008.  The increase could be worth up to €2,000 a year in tax relief for some couples and single first time buyers will benefit by up to €1,000.  It is advisable to check with your lending institution that the increase has been applied to your account.

If you are thinking of buying a home and you find a suitable property, it is advisable to set the train in motion well in advance of 31st December 2012 to allow sufficient time to draw down the mortgage and complete the transaction before 31st December 2012 thereby ensuring that you are within the time to qualify for mortgage interest relief.

If you or someone you know is buying a new home, contact Nuala Teahan, Solicitor for a conveyancing quote today on 021 427 5220 or by email on nteahan@kmccarthysolicitors.ie

Tags: , , ,

Leave a Reply

Your email address will not be published. Required fields are marked *

About Us & Contact

Kieran McCarthy & Co. Solicitors
Floor 3B, 6 Lapps Quay, Cork.
t: 021 427 5220 | f: 021 427 5250

  • follow