Remortgage - Interest Relief

If someone remortgages their PPR in order to buy a rental property, are they allowed to claim interest relief on the mortgage interest paid against rental income in their tax return?

Only if there is a Mortgage on the Rental property...and you could only claim relief on 75% of the interest paid on that mortgage (i.e no relief could be claimed against the mortgage on PPR..although you could still be entitled to Mortgage Interest TRS on the PPR mortgage - if there is an existing mortgage which was drawn down before 31st Dec 2012).

Is it not the case that a remortgage that increases the outstanding mortgage on your PPR can result in you being able to write off 75% of the increased mortgage interest, up to the value of the rental property, provided you have evidence that the reason the PPR mortgage was increased was to purchase the rental property.

The mortgage doesn't necessarily need to be secured on the rental property itself, nor does the rental property have to have its own mortgage.

This is the best way to finance a rental property, given the lower rates on a residential mortgage.


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