Mortgage interest relief for people buying before the end of 2012

If a couple trades up in 2012 i.e. their second or later home, do they qualify for tax relief on that mortgage until 2017?

Is the following example correct?


For first time buyers, is the following correct?

Yes (x3). Looks right to me anyway. FTBuyers will get 25% for two years, 22.5% for three years and only hit 20% in the months till end 2017- they should average 23.5% interest relief (on a maximum of €20000 interest per year).

Thanks

What are the practicalities of buying before the end of the year.

Must the sale be closed on or before 31 December?

Or is it sufficient to exchange contracts and close the sale in the New Year?

I know of one person who is able to exchange contracts now, but the existing owners want to delay the closing until June 2013.

Brendan - I believe that the mortgage has to be drawn down before the end of the year to qualify

http://www.revenue.ie/en/tax/it/leaflets/tax-relief-source-mortgage-interest-relief.html#section2

What is the position if I take out a loan in 2013 or later?

Home Loans taken out in 2013 or later do not qualify for mortgage interest relief. Tax relief is available in respect of interest paid on a qualifying loan, taken out on or after 1 January 2004 and on or before 31 December 2012, which was used to purchase, repair or improve a qualifying residence. Taken out prior to 31 December 2012 means that the loan has been drawn down and used by you on the qualifying residence (e.g. purchase of site plus building costs) before that date

Thanks mandelbrot

That couldn't be any clearer.

It's going to be very tough on people who don't get their paperwork through their bank on time.

Brendan

I wonder will they extend it Brendan

Effective date for drawdown of mortgage to qualify for Mortgage Interest Relief

Hi there

I am in the position of possibly missing out on mortgage interest relief due to issues with a property that we have been sale agreed on since June (missing title deeds and probate). We got some news today to make us think that we should be able to close in the next few weeks, but I previously contacted the bank to find out the effective final date for drawing down the mortgage to meet the 31st December deadline.

The mortgage advisor in BOI advised that Monday 17th December would be the latest we would need the cheque to be issued to ensure that it would have 5 working days to clear and allowing for their opening hours on Christmas week etc.

WindUp said:

I wonder will they extend it Brendan

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Politicians are not averse to the odd U-turn, but they have been signalling strongly that it won't be extended. Both Noonan and Brian Hayes (more recently) have stated this.

http://www.rte.ie/news/2012/0628/no-extension-on-mortgage-interest-relief-noonan.html



The vested interests of the property industry are still lobbying for an extension, as they rightly fear its end.

bugler said:

Politicians are not averse to the odd U-turn, but they have been signalling strongly that it won't be extended. Both Noonan and Brian Hayes (more recently) have stated this.
.

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And never underestimate the urge of politicians to interfere in the property market.

michaelm said:

Yes (x3). Looks right to me anyway. FTBuyers will get 25% for two years, 22.5% for three years and only hit 20% in the months till end 2017- they should average 23.5% interest relief (on a maximum of €20000 interest per year).

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Remember that 2012 is year 1. Year of assessment runs from 1st Jan to 31st of Dec.

Mrtg Int Relief - Facts Sought

I have heard that interest must be paid before the end of the year, not just the funds drawn down. Could just be the paranoia setting in as the deadline looms.

Applying for the relief seems fairly straight forward via revenue.ie. I presume myself and my girlfriend (1st time buyers) just apply separately and then the revenue apply the relief to each of use on the one mortgage? Anyone know how long they generally take to sort it out? In time for the first installment. I'm drawing down a mortgage on the 30th Nov, should I apply for the TRS now or wait until the mortgage is live?

Looking for confirmation also on the mechanics of how the relief is applied. Full amount gets debited from the account and then on the same day the relief amount is credited back to the same bank account?

Mortgage interest relief is provided at source by your lender either in the form of a reduced monthly mortgage payment or a credit to your funding account.

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It depends on the bank then. Anyone know how AIB work it?

MIR will be on the interest on the amount drawn down before 31st . That's what revenue's website says and what the bank have told me. I'm pretty sure I checked the finance act too

It will only be for 5 years though, wont it? 2013, 2014 , 2015 , 2016 and 2017