Tax
Relief
Relief
is available in respect of interest paid on a mortgage or loan
acquired to purchase repair or improve a main residence.
| - |
Single |
Widowed |
Married |
- |
| First
Mortgage |
4000 |
8000 |
8000 |
years1
to 7 |
| Others |
3175 |
5079 |
5079 |
- |
Relief
is given at the standard rate of tax
For example a single person with interest payments in year one
of €4000 or more would obtain interest relief of €800
(4000* 20%)
To calculate mortgage interest tax relief for your mortgage please
click here.
From
1 January 2002 tax relief for home mortgage interest is no longer
given through the tax system, but instead is granted at source.
This means that your tax relief element on the mortgage interest
is "built into" the monthly mortgage repayment. For
most lenders this is shown in two separate items on your bank
account statement. First you will see the direct debit for the
monthly mortgage payment and next to it you should see a corresponding
credit for the tax relief on the interest.
The
interest relief amount is calculated on an annual basis to reflect
the reduced interest as your mortgage amount decreases. The lender
will then calculate the mortgage interest relief and apportion
that over the 12 months.
How
do I get the tax relief?
When
you take out a new mortgage, your lender will supply you with
a form TRS1 to complete. This form will show your mortgage account
number as well as your personal details (name address and RSI
(personal tax number). This form will need to be signed by you
and returned to your local tax office. From there the revenue
will contact your lender directly to arrange for the tax credit
to be applied. The process may take a couple of months and if
you don't see the credit coming through on your bank statement
after this period, you may have to contact the local tax office
to make sure your form has not been misplaced.
In
the case of a loan in joint names, each borrower is entitled to
relief in his or her own right subject to the upper limits. Where
the mortgage payment is made in full by one of the joint borrowers,
the reduction in the monthly payment under this TRS system should
reflect the aggregate relief due to all joint borrowers.
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