Persons who purchased homes since 2002 will have their mortgage interest relief cut off with effect from 1st May, until they can demonstrate their true entitlement. This move by the Revenue Commissioners means that mortgage holders presently registered as owning up to 230,000 homes will face higher mortgage bills.
This move comes despite assurance in the recent Supplementary Budget that homeowners would continue to claim relief for the first seven years of their mortgage.
Quote: Supplementary Budget April 2009 Documents:-
Annex C – Mortgage Interest Relief
Mortgage Interest relief will only be available now for the first seven tax years from the date on which a mortgage is taken out. This means that any taxpayer who has received mortgage interest relief for more than 7 tax periods will no longer be eligible for such relief from 1 May 2009.
Those home owners affected include 118,000 persons who may have switched their mortgage provider in search of better deals or those who have received top-up mortgages. Banks and building societies presently deduct the tax relief at source in an agreement with the Revenue.
Letters of notification from the Revenue Commissioners will start to issue in the coming weeks, asking them to provide details of their present mortgage and evidence that the money has been used solely for the purchase of their principal private residences in the State, rather than for other purposes, such as new cars, second homes, educational fees, or to pay existing debts.
The relief is presently worth up to €900 a year for a working couple who jointly hold the mortgage on their principal private residences in the State.
It has presently been determined that mortgages on a possible 57,000 properties in the 26 counties will no longer be entitled to mortgage relief from Friday next. The present owners of as many as 230,000 other homes will also lose their relief until the Revenue Commissioners are convinced that a true entitlement exists.
People fully entitled to mortgage interest relief will have the backdated moneys credited to their accounts once this Revenue exercise is completed.
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