Mortgage interest relief on Inv Prop- Is it capped

[sport]

I am converting my PPR to an investment property. I believe mortagae interest is allowed in calculating my nett income from this property. Does anyone know how much interest is allowed i.e. say I originally purchased the property for 120k (with a mortgage of 100k), I have since paid off 30k of this so my existing mortgage on this proprty is 70k. I will however, re-mortgage this property to an amount of 200k. Can I get relief from the interest i will pay on the 200k or do revenue cap the mortgage interest allowed at some other figure? (e.g. the original purchase price of the house).......Many thanks,

 

[ClubMan]

There is no mortgage interest relief on investment properties. You can however offset 100% of mortgage interest on any loans used to purchase/renovate the investment property (no matter what property or asset they are secured on) against rental income. If a particular loan is split between funds used to purchase/renovate the investment property and for some other use then you calculate the interest pro-rata when apportioning it.

 

[sport]

Thanks Clubman,
As you rightly point out, I did mean could I offset the mortgage interest against rental income. If I understand you correctly, in my case I can only offset the interest I am paying on the original loan (mortgage) I took out to purchase the property. I have actually switched lenders and so the original loan has been repaid (because I remortgaged with the new lender)- can I offset the same amount of interest that I am paying on the new loan?
Many thanks,
Sport

 

[ClubMan]

If any top-up on the original loan was not used to purchase/renovate the investment property then only interest on the amount outstanding when the property became an investment property would be allowable against rental income (e.g. €70K). If in doubt get independent, professional tax advice.