Mortgage Interest Relief - 3 people on mortgage

C

ciaranhyde

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Wonder if anyone can help answer this one.

My wife and I bought a house 2 years ago as FTB but to qualify for the mortgage we had to put her mother on the mortgage so there are 3 of us on it although the deeds are only in our name. Her mother doesn't live in the house although we do. Can we claim mortgage interest relief or do all 3 people have to be resident there?
 
Thanks Clubman. Do Revenue not give partial tax relief (say two thirds) in a case like this? After all 2 of the 3 people are resident in the house.
 
The two owner occupiers can claim the full relief that applies to them. If your mother was effectively a joint buyer and was not a FTB then all of you collectively are considered non FTBs even if two of you never bought a house before as far as I know. Not sure if you can still claim the FTB rates of relief though. See [broken link removed] for the 2006/7 maximum rates of owner occupier mortgage interest relief. If you have not been claiming any for the past two years then you can backdate your claim. If you weren't then why not?
 
ClubMan said:
The two owner occupiers can claim the full relief that applies to them. If your mother was effectively a joint buyer and was not a FTB then all of you collectively are considered non FTBs even if two of you never bought a house before as far as I know.
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I think the OP and wife should be okay to claim FTB TRS - the FTB status recognition isn't a problem for TRS, though it is for stamp duty purposes. I don't have the relevant Revenue leaflet to hand, but it is quite clear that where one buyer has FTB status and the other does not, the TRS is granted on the basis of each individual buyer's status. In addition, if the mother doesn't have a beneficial interest in the property as is suggested by her name not being on the deeds, then her status shouldn't have an effect.

Ciaranhyde, if you and you wife are the only ones paying the mortgage, even though your mother is on it (is it as guarantor, or as a joint applicant?), then you'll be able to claim TRS on the full amount. However, you should contact Revenue to get full clarification.
 
Thanks - I just wasn't sure if/how the non FTB status for SD might affect the FTB status for TRS. Just on that point - is the original poster sure that there are not any outstanding SD issues with the original purchase given that one buyer (?) was not an owner occupier and the three together were not jointly FTBs?
 
Hi, thanks for the help. My mother-in-law is on the mortgage as a joint applicant as my wife's income was not enough. However, the mother-in-law has no beneficial interest in the property as she is not an owner and has no title to the property.

We did not pay SD on the purchase as we were first time buyers and there didn't seem to be a problem with this when we bought the house. Obviously, the mother-in-law is not a FTB but then she wasn't buying the property only going on the mortgage.

It could be shown if necessary that the mother-in-law doesn't pay anthing towards the cost of the mortgage.

I was unclear that as we want to apply for TRS on the mortgage whether all 3 people had to be resident. The Revenue refer to "owner-occupiers" but clearly in this case only 2 people are "owner-occupiers" but 3 people are on the mortgage. It seems mighty confusing!?

What's the worse that can happen if I apply for TRS?
 
ciaranhyde said:
Hi, thanks for the help. My mother-in-law is on the mortgage as a joint applicant as my wife's income was not enough. However, the mother-in-law has no beneficial interest in the property as she is not an owner and has no title to the property.
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Is her name on the property deeds? If so then she does have a beneficial interest. Even being on the mortgage may be deemed having a beneficial interest. Probably best to get independent, professional advice.
We did not pay SD on the purchase as we were first time buyers and there didn't seem to be a problem with this when we bought the house. Obviously, the mother-in-law is not a FTB but then she wasn't buying the property only going on the mortgage.
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As above/
I was unclear that as we want to apply for TRS on the mortgage whether all 3 people had to be resident. The Revenue refer to "owner-occupiers" but clearly in this case only 2 people are "owner-occupiers" but 3 people are on the mortgage. It seems mighty confusing!?

What's the worse that can happen if I apply for TRS?
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I don't think that there is any worst case scenario here. You and your wife are entitled to it as far as I can see so you should apply and backdate the claim too.
 
Thanks Clubman, I think I'll get some professional advice as suggested and if that looks promising I'll apply and backdate it. I have a fear of the Revenue making a mistake as they did with me years ago (about another matter) and then when they realised I was left to foot the bill. They apologised but it cost me a lot. :-(
 
Sorry, forgot to answer one of your questions Clubman. The mother-in-law is not on the title deeds but is a joint mortgagee. She has never made any payments to the mortgage so it could be suggested that as she has not contributed to the mortgage and that her name on the mortgage is just an expedient. We didn't have to pay SD as the solicitor seemed happy enough that myself and my wife were the only people on the deeds and therefore were FTB
 
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