In a bid to provide relief to mortgage holders who faced substantial interest rate hikes last year, a special tax credit of up to €1,250 has been introduced. Announced in October as part of Budget 2024, the one-off bonus is accessible through a tax credit, but individuals need to file a tax return to avail themselves of this opportunity, according to RSVP Live.
Those most likely to benefit from this temporary tax credit include individuals on tracker rates, those with variable rates, and those unable to fix their mortgage due to it being sold to a vulture fund. The relief is applicable to mortgages ranging from €80,000 to €500,000 at the end of the previous year, covering changes in mortgage repayments throughout the year, up to a maximum of €1,250.
To facilitate the claiming process, Revenue has announced the implementation of a new system for PAYE workers to claim the relief later this month, with self-assessed taxpayers gaining access in mid-February. However, certain conditions must be met to qualify for the mortgage interest tax credit:
1. Outstanding mortgage balance between €80,000 and €500,000 on December 31, 2022.
2. Loan with a qualifying lender, listed by the Central Bank of Ireland as a credit information provider.
3. Payment of interest on the loan in 2022 and 2023.
4. Increase in interest on the loan from 2022 to 2023.
5. Property located in the State.
6. Compliance with Local Property Tax obligations and planning permission requirements.
7. Property serving as the sole or main residence or a residential property used by the taxpayer, spouse, or civil partner for work-related purposes.
Claiming the tax credit involves making an income tax return for 2023 using Revenue’s MyAccount or ROS services. The tax credits page for the year 2023 will feature a ‘mortgage interest tax credit’ option. To claim, individuals will need to submit specific documents, including the certificate of mortgage interest for 2022 and 2023, along with confirmation of the mortgage balance at the end of 2022. The submission process can be completed online through Revenue’s MyAccount or ROS services.
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