mortgage interest relief

[Ret45]

I intend to let my house in Dublin as I am moving to the west.

I currently have a repayment mortgage. I would like to remortgage the property and switch to an interest only mortgage.

My question is: if I remortgage the property and add say, another EURO 50,000 to the remortgage loan, can I claim tax relief on all interest payable on my new mortgage loan once I let out the property. Or, is only the interest on the original mortgage loan taken when I purchased the property allowable.

I have not rented the property before as it is my PPR.

thanks,

 

[ClubMan]

My question is: if I remortgage the property and add say, another EURO 50,000 to the remortgage loan, can I claim tax relief on all interest payable on my new mortgage loan once I let out the property.

You mean can you offset interest on the full topped up mortgage against rental income? Not the same as caliming relief on it or "mortgage interest relief". Anyway the answer is no - you can only offset interest on the amount outstanding at the time the property is rented out against rental income. Unless the top-up is used to renovate the property.

Or, is only the interest on the original mortgage loan taken when I purchased the property allowable.

Yes - on the amount outstanding when you first rent it out.

I have not rented the property before as it is my PPR.

If you bought it less than 5 years ago then you will also be liable for a clawback of stamp duty as covered many times here on AAM.

 

[Ret45]

Thanks ClubMan and apologies for the confusing way the question was put.

To follow up on your response - as I have not rented the property yet, if I switch to an interest only mortgage (and top up the mortgage at the same time) BEFORE I rent it out, can I offset interest on the new interest only mortgage against rental income. In other words I would propose to remortgage before I rent out.

Ret

 

[ClubMan]

if I switch to an interest only mortgage (and top up the mortgage at the same time) BEFORE I rent it out, can I offset interest on the new interest only mortgage against rental income. In other words I would propose to remortgage before I rent out.

You can offset interest on the amount outstanding on the original mortgage against rental income. If you switch to interest only then you can offset that amount. I don't think that it matters when you switch from annuity/repayment to interest only. Obviously you cannot offset any interest on any mortgage top-up amounts unless the top-up is used to renovate the property. The key thing here is the amount on which interest is allowable against rental income. Whether the mortgage is or will be annuity/repayment or interest only is another matter.

 

[xpresso]

Just Wondering,

Can you not claim full interest relief on any rental income that you get if you have an interest only mortgage, that has been topped up?