TRS Query

[gilboy]

Hi

I purhased my first house(in Dublin) about 4 years ago. 2 years after this I decided to move home to the west, build a new house and keep the house in Dublin and rent it out.

I raised money for the house in the west, by topping up my mortgage in the Dublin property by 100K(to purchase the site) and then got a separate mortgage to build the property.

However, now that I have started letting the Dublin property I need to switch my TRS to the property in the west. However, the mortgage on the property in the west is 100K less because of me topping up the Dublin mortgage to purchase the site.

For TRS purposes is there anyway I can ensure that I can claim relief for the value of the mortgage in the west + 100K

Thanks

 

[ClubMan]

I purhased my first house(in Dublin) about 4 years ago. 2 years after this I decided to move home to the west, build a new house and keep the house in Dublin and rent it out.

You were presumably liable for a clawback of stamp duty - did you pay this?

I raised money for the house in the west, by topping up my mortgage in the Dublin property by 100K(to purchase the site) and then got a separate mortgage to build the property.

Not that you cannot offset interest on the topup against rental income - just interest on the amount outstanding at the time you vacated the Dublin property and rented it out.

However, now that I have started letting the Dublin property I need to switch my TRS to the property in the west.

Did you stop claiming TRS on the Dublin property mortgage immediately when you rented it out? If not then you will have claimed relief incorrectly and will need to rectify this situation.

However, the mortgage on the property in the west is 100K less because of me topping up the Dublin mortgage to purchase the site.

You can claim owner occupier mortgage interest relief on any loans used to purchase the second property. This includes the €100K secured on the Dublin property and any other loan(s). However claiming the relief will be a bit more complicated than the normal situation in which there is only a single loan/mortgage with all relief granted at source. Just contact Revenue about it.

Obviously you will need to ensure that your rental income and related tax issues are in order.

 

[gilboy]

Thanks for the information below ClubMan

In relation to the stamp duty clawback, I was a little unclear here. I am only starting to rent out the Dublin property now, it has been my PPR up until this point as 2nd property only complete now.

Hence it is my understanding that I am not liable to stamp duty clawback, i.e. did not rent Dublin property within 2 years of purchase of the property.

I will get in touch with the revenue about using the 100k topup for my mortgage interest relief calculation for 2nd property.

Thanks

 

[ClubMan]

In relation to the stamp duty clawback, I was a little unclear here. I am only starting to rent out the Dublin property now, it has been my PPR up until this point as 2nd property only complete now.

If you are only starting to rent it now and own it more than 2 years then the SD clawback is irrelevant.