lose interest relief on investment property?

[gkp]

Five years ago I got a mortgage on my principal private residence to fund the purchase of an investment property in Canada. I have been claiming tax relief on the interest payments against the rental income without issue.
Now looking to move house which I presume will mean paying off all mortgages on the house so looks like I will lose the tax relief on the investment property income? Any advice on how to keep this or is the answer that I should have taken out the mortgage on the Canada property?
Thanks for any suggestions.

 

[Brendan Burgess]

Disclaimer: This is an unusual one and you need to get tax advice or revenue clearance before taking any steps. The following are just some ideas to pursue.

You get tax relief on money borrowed to buy an investment property. It doesn't matter what it is secure on.

If you sell your home and repay the mortage, you will be left with a mortgage free investment property. If you then borrow money to buy a home, it will not be an investment loan.

You also get tax relief on money borowed to replace a loan used to buy an investment property.

I suggest the following are worth trying with your bank

1) Ask them to transfer the mortgage to the Candadian property
2) Assuming they refuse, ask some other lender to lend you money , secured on your Canadian property, to refinance the loan.

I don't know the interaction between Canadian and Irish tax, so you really need professional advice on this one.

 

[gkp]

Disclaimer: This is an unusual one and you need to get tax advice or revenue clearance before taking any steps. The following are just some ideas to pursue.

You get tax relief on money borrowed to buy an investment property. It doesn't matter what it is secure on.

If you sell your home and repay the mortage, you will be left with a mortgage free investment property. If you then borrow money to buy a home, it will not be an investment loan.

You also get tax relief on money borowed to replace a loan used to buy an investment property.

I suggest the following are worth trying with your bank

1) Ask them to transfer the mortgage to the Candadian property
2) Assuming they refuse, ask some other lender to lend you money , secured on your Canadian property, to refinance the loan.

I don't know the interaction between Canadian and Irish tax, so you really need professional advice on this one.

Thanks Brendan. I have enquired about the first option so shall see what they come back with.