How much tax relief will I get?
Tax relief is granted on the amount of the interest paid, subject to the overall limits please refer to Tax Relief at Source (TRS) for Mortgage Interest Relief .
How can I claim the relief?
From 1 January 2002, tax relief for home mortgage interest is no longer given through the tax system but is instead granted at source. This means that your mortgage lender gives you the benefit of the tax relief element on the mortgage interest on behalf of the Revenue Commissioners.
Your mortgage repayment is reduced by the amount of the tax relief. Your lender in turn claims this amount from Revenue. Any future adjustments in the tax relief (for example, arising from changes in interest rates) will be made automatically by the lender on behalf of Revenue. It is not necessary to claim mortgage interest relief in the annual tax return, and it no longer appears on your Tax Credit Certificate. Borrowers who are taking out new mortgages or who wish to claim for relief due for previous years must В apply online .
To help with the mortgage repayments, I intend letting part of my house. What tax relief can I claim against my personal income tax and against the rental income?
In this situation, part of the mortgage interest may be claimed as a normal interest credit against your personal income tax. However, the balance of the interest may not be claimed as a rental deduction. The mortgage interest applicable to the let part of the house will be determined on a just and reasonable basis. For example, the apportionment of the interest may be by reference to the number of rooms let. For more information please see IT70 - A Revenue Guide to Rental Income.
Home Improvement Loans
Can I claim tax relief on a loan for home improvements?
Yes. You can claim tax relief on a loan used by you to purchase, repair, develop or improve your sole or main residence or to pay off another loan (or loans) used for that purpose.
What can the loan be used for?
The loan can be used for most work done on your sole or main residence except for money spent on furniture or removable fittings (e.g. light fittings, curtains, carpets etc.). Examples of what the loan may be used for are:
- Extensions, purchase/construction of garage, garden shed, greenhouse etc.
- Construction of driveway, path etc.
- Conversions, painting and decorating
- Installing central heating
- Rewiring or replumbing (including bathroom suites)
- Replacing or installing windows
- Purchase and/or installation of burglar/fire alarms
- Purchase and installation of bedroom
and kitchen units which are affixed to and become part of the building
- Treatment for damp, dry rot, woodworm etc.
- Landscaping gardens (including garden walls)
- Contributions to group water and sewerage schemes.
Selling a House
If I sell my house will I have to pay Capital Gains Tax?
If you sell your home (your sole or main residence) you may be entitled to Principal Private Residence (PPR) relief from Capital Gains Tax (CGT). If the residence (as defined above) has been occupied as your sole or main residence throughout your period of ownership, and PPR relief is not restricted for any other reason, you will be exempt from CGT on the sale. Where the house has a garden of up to one acre (0.405 hectare) this land can also be considered as part of your home for the calculation of PPR relief, the relief will not apply to land in excess of this area. Although in most cases where an individual sells their home full PPR relief will apply, relief may be restricted where the house (or part of the house) has been let or used for business purposes, or where the property has "development value". Relief may also be restricted where the individual has not used the house as their home for the full period of ownership. However, the last twelve months of ownership may be considered to be a period of deemed occupation for PPR relief purposes, this might be relevant for example where a person has moved into a new home but is still selling their previous home.
Please note that even where PPR relief means that no CGT is payable you will still be required to provide a tax return in relation to the sale.
What happens if I had let part of the house or used part of the house for business purposes?
Full exemption may not be due if only part of the house has been used as your residence. In this case an apportionment will be made to arrive at the exempt portion of the total gain and you will have to pay CGT on the balance. Where a room in your home has been let in accordance with the "rent-a-room relief" scheme that element of the letting will not affect your PPR relief.
What happens if my property has "development value"?
Where your property has development value i.e. if it is sold for a price higher than its current use value (this is essentially the non-development value) then the relief from CGT as outlined above is confined to what it would be if the property did not have development value.
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