Mortgage Interest Relief

[ronaldo]

I am currently working in the UK but am in the process of buying a house at home in Ireland. I intend to rent it out while living in the UK and then moving back to Ireland in a couple of years time.

What way does mortgage interest relief work, i.e do I claim it in the UK or Ireland or does the benefit be deducted from my actual mortgage payments?

 

[ClubMan]

Unless you have been seconded to work in the UK and/or can qualify for the Revenue condition whereby somebody occupies the property on your behalf as your PPR (principal private residence) while you are obliged to work abroad (I've never understood the ins and outs of this so check with Revenue or maybe somebody else here can clarify the requirements) then you are not buying as an owner occupier but as an investor and thus are liable for investor stamp duty on the purchase, some CGT on the eventual resale gain and no Irish owner occupier mortgage interest relief. Don't know what, if any, UK relief you may be entitled to but I suspect none. On the other hand you can offset 100% of mortgage interest as an allowable expense against rental income when calculating your rental income tax return. See the Property Investment FAQ for more on this and the general tax treatment of investment properties. When you return to Ireland and occupy the property as your PPR then you can start claiming owner occupier mortgage interest tax relief. This thread above the pros and cons of using an interest only mortgage for your investment property might also be of relevance. If in doubt get independent professional advice. Hope this helps.