Tax relief for mortgage interest on a home loan is tax relief given to mortgage holders based on the interest paid on a qualifying mortgage i.e. a mortgage for a home, a top up loan used for the purposes of developing or improving your home, a separate home improvement loan, a re-mortgage or a consolidation of existing qualifying loans [i.e. loans used for the purchase, repair or improvement of your home], secured on the deeds of that home.
In recent years, successive Budgets have changed the rules on Mortgage interest relief eligibility. In view of this, you will need to check if you qualify.
- Mortgages taken out after 31 December 2012 DO NOT qualify for mortgage interest relief.
- Mortgages taken out prior to 1 January 2004 are NO LONGER ELIGIBLE for mortgage interest relief.
Source: Citizens Information – Mortgage interest relief
The Revenue Irish Tax and Customs website provides a useful step-by-step guide on Tax Relief for Mortgage Interest Paid on a Home Loan
Mortgage interest relief cannot be claimed for interest on a loan used to buy a holiday home, an investment property, loan/debt consolidation or for any other purpose which does not qualify for the relief. Source: Acquiring a Foreign Property Revenue Irish Tax and Customs
Revenue only count properties bought in the South when assessing an individual for First Time Buyer status. For further information Tel 061-488780.
If you are living in the State and paying a mortgage to a qualifying lender in the State but working in Northern Ireland, you can claim mortgage interest relief in this country [Republic of Ireland], provided you have a PPS number. If you do not have a PPS number, you must apply for one from the Department of Social Protection. [See PPS Number]
Other loans, such as loans in UK currency, are not eligible for relief through the Tax Relief at Source Scheme but may be eligible for relief from your Local Inspectors Office. You should contact your Local Inspectors Office for further information.
Mortgage interest relief on Northern Mortgages
If your home is located in Northern Ireland relief is also available but cannot be claimed through TRS. The residence can also be the sole or main residence of your former or separated spouse or a dependent relative who occupies the residence rent-free.
The following clarification was received on 19th November 2010 from The Revenue Commissioner, TRS Section:
Mortgage Interest Relief in respect of the purchase, repair, development or improvement of a persons sole or main residence in Northern Ireland continues to be allowed through the income tax system.
So if you are working in the South but living and paying a mortgage in Northern Ireland you are not entitled to Tax Relief at Source, instead you will receive your tax relief via your employer’s PAYE system:
- TRS – The relief is given at source, by your lender, either in the form of a reduced monthly mortgage payment or a credit to your funding account
- PAYE – You pay the full mortgage amount to your lender and the relief will be added to your wages instead
You should forward a letter to the address below, explaining that you are a cross border worker and wish to claim tax relief on your mortgage payments. Also include your P60 and your Certificate of (Mortgage) Interest.
The Office of the Inspector of Taxes
City Centre District
9/15 Upper O’Connell Street
Telephone: 1890 333 425 or 01 865 5000 or 01 647 4444
Email: Customer Service for PAYE Customers firstname.lastname@example.org
Email: Customer Service for Income Tax and Corporation Tax email@example.com
- Citizens Information – Mortgage interest relief