Revenue suspending Mortgage interest Relief

AKA said:
I wonder how revenue are going to handle top ups that were used to repay the original deposit.

Credit union and 'gift' from parents and loans from other siblings for deposit -> graduate loan within year of house purchase -> top up including renovations.
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It was underhand to begin with so therefore should not be entertained imo. I did it myself - it was out and out lying to the lender that the cash in that CU was my own, not my mothers loan to look good - i did not however top up. so some people did and have a bigger mortgage over 7 years - i don't think i want a loophole created for these people to be honest.
 
I'm all confused now! Some lad from the Revenue Commissioners on Morning Ireland is after saying much the opposite of what I thought already. He seemed to be suggesting that the seven-year rule applied to a mortgage rather than first time buyer status.

He suggested that someone who, for example, had owned a house a Cork for some time (unspecified), moved to Dublin in 2005 and bought a house there that they would be entitled to mortgage interest relief until 2012, i.e. for the first seven years of this mortgage. Changing lenders or mortgages in this period would have no effect on this as the Revenue would regard the mortgage as being the loan issued on the house in Dublin. However it seems that moving house gives an entitlement to mortgage interest relief as this would be classed as a new mortgage.

Does the seven years not begin from the time a person first buys a house?
 
But what if you didn't buy the house.

My wife is living in her family home which her mother signed over to her.

She/we then borrowed against the property to build on to it etc. We got the mortgage in 2006 and it was the 1st and only for both of us.

Where do we stand ??
 
This is hugely confusing and is entirely unfair at a time when we are taking a heavy hit in May.

What some are suggesting is as follows (say in my own case):

1. FTB 2003 - 7 years on the FTB int relief. Finish Aug 2010
2. New house in 2007. Still FTB, finish Aug 2010

However what seems to be emerging is that I am actually entitled to a further 7 years of interest releif on the new house from 2007. Maybe that means on the FTB level 'til 2010 and then the old level 'til 2014.

If this is the case, it's a massive loophole as I assumed after the last budget int relief would just stop.

Is this understanding correct?
 
Westbound said:
This is hugely confusing and is entirely unfair at a time when we are taking a heavy hit in May.

What some are suggesting is as follows (say in my own case):

1. FTB 2003 - 7 years on the FTB int relief. Finish Aug 2010
2. New house in 2007. Still FTB, finish Aug 2010

However what seems to be emerging is that I am actually entitled to a further 7 years of interest releif on the new house from 2007. Maybe that means on the FTB level 'til 2010 and then the old level 'til 2014.

If this is the case, it's a massive loophole as I assumed after the last budget int relief would just stop.

Is this understanding correct?
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for you
2003 yr 1
2004 yr 2
2005 yr 3
2006 yr 4
2007 yr 5 yr 1
2008 yr 6 yr 2
2009 yr 7 yr 3 for the remainder of this year you will get 20% of interest or ceiling whichever is lower
2010 yr 4 from this point on you will get 15% of ceiling or interest whichever is lower until 2013
2011 yr 5
2012 yr 6
2013 yr 7
 
Thanks for that, makes it very clear. One query - 2009 is year 7, does this mean the FTB level finishes 31 12 2009 and not Jul 2010 (the anniversary of the first house)?
 
Westbound said:
Thanks for that, makes it very clear. One query - 2009 is year 7, does this mean the FTB level finishes 31 12 2009 and not Jul 2010 (the anniversary of the first house)?
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correct in the end being this year 31/12/2009

the tax year and interest year follow each other.
just say you drew down in a november your first year would end that december.
 
rameire said:
for you
2003 yr 1
2004 yr 2
2005 yr 3
2006 yr 4
2007 yr 5 yr 1
2008 yr 6 yr 2
2009 yr 7 yr 3 for the remainder of this year you will get 20% of interest or ceiling whichever is lower
2010 yr 4 from this point on you will get 15% of ceiling or interest whichever is lower until 2013
2011 yr 5
2012 yr 6
2013 yr 7
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That's really clear. I didn't know you got additional relief if you bought another home. I took out first mortgage over 7 years ago and haven't taken another one out, so my relief dropped this year anyway to 37.50 - so not a huge loss but on top of everything else, it's all adding up!
 
moneyhoney said:
That's really clear. I didn't know you got additional relief if you bought another home. I took out first mortgage over 7 years ago and haven't taken another one out, so my relief dropped this year anyway to 37.50 - so not a huge loss but on top of everything else, it's all adding up!
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come tomorrow you will no longer get trs.
 
Quick question?

We bought house(FTB) in 2004, changed mortgage provider in 2007, so new mortgage started in 2007, does TRS apply to us from
2004 - 2011?

Or does it kick off again and start from
2007 when new mortgage started?
2007-2014?
(I know this is probably wishful thinking!!)

Either way, it looks like the TRS will be taken off us until we reapply because we changed morgage provider?

Thanks,
C
 
Cyrstal said:
Quick question?

We bought house(FTB) in 2004, changed mortgage provider in 2007, so new mortgage started in 2007, does TRS apply to us from
2004 - 2011?

Or does it kick off again and start from
2007 when new mortgage started?
2007-2014?
(I know this is probably wishful thinking!!)

Either way, it looks like the TRS will be taken off us until we reapply because we changed morgage provider?

Thanks,
C
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the below only applies if you changed property, if you didnt change property, your trs will cease in dec 2010, for the time being also you should not have to reapply for trs if you only changed provider.

only people on the 15% rate will be taken off the trs system for one month.
your situation if new property bought
2004 yr 1 ftb
2005 yr 2 ftb
2006 yr 3 ftb
2007 yr 4 ftb (2nd mortgage yr 1 )
2008 yr 5 ftb (2nd mortgage yr 2 )
2009 yr 6 ftb (2nd mortgage yr 3 ) rate 20%
2010 yr 7 ftb (2nd mortgage yr 4 ) rate 20%
2011 ----- (2nd mortgage yr 5 ) rate 15%
2012 ----- (2nd mortgage yr 6 ) rate 15%
2013 ----- (2nd mortgage yr 7 ) rate 15%

you should not be taken off the trs system for may, it should continue for you.
 
If you are losing your TRS because you are not a FTB (yr 1 to yr 7) but your other half still has their FTB status, you could, in fact, gain slightly....

Projected Interest taken to be €10,000

TRS Calculation 2009 (before budget #2 change)

Proportion Calculation
Non-FTB Joint a/c holder: €3,000/13,000 = 23.08%
FTB Joint a/c holder: €10,000/13,000 = 76.92%

Non-FTB Joint a/c holder: €10,000 x 23.08% = €2,308 @ 15%
FTB Joint a/c holder: €10,000 x 76.92% = €7,692 @ 22.50%

= €2,077 p.a. or €173 per month

TRS Calculation 2009 (after budget #2 change)

FTB Joint a/c holder €10,000 x 100% = €10,000 @ 22.50%
= €2,250 p.a. or €188 per month
 
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