Taxman ends mortgage relief for 154,000 ineligible homeowners
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TENS of thousands of homeowners have had their mortgage interest relief stopped after being found ineligible under rules introduced in the emergency budget.
The Revenue Commissioners yesterday confirmed that 154,000 mortgages -- around a quarter of the total previously entitled to relief -- are now considered ineligible.
These mortgage holders stand to lose up to €75 a month, or €920 a year, in tax relief.
And officials from the Revenue will now write to 134,000 other homeowners who have had their reliefs frozen, asking for further information.
In the April 7 Budget, the Government decided that the tax relief on principal private residence loans would be available only for the first seven years. First-time buyers are entitled to mortgage tax relief for the first seven years of their mortgage, but tax relief is also available to people who took out a new mortgage within the past seven years, or those who take out a new mortgage to move house from now on.
People who have topped up their mortgage to do work on their house are entitled to tax relief on the top-up loan for seven years.
Some 564,000 mortgage accounts were entitled to some form of tax relief on mortgage interest before the changes in the budget.
However, in a statement yesterday the Revenue said that just 276,000 of these mortgage accounts would continue to qualify for tax relief.
Another 154,000 people have been ruled ineligible to continue to get mortgage tax relief.
Letter
These people will not get a letter from Revenue but may get a letter from their lender telling them they no longer qualify for mortgage relief, a Revenue spokesman said.
But tax officials were unsure whether another 134,000 mortgages would continue to be eligible.
A spokesman for the Revenue said difficulties have arisen as officials were not sure if these 134,000 mortgages were taken out on principal private residences or on investment properties.
These 134,000 mortgage holders do not need to do anything as they will receive a letter in the next couple of weeks.
Alternatively, they can log on to www.revenue.ie and update their details online. People who do not have an internet link will be accommodated over the phone, the spokesman said.
"Once the information is submitted online, Revenue will very quickly establish if a loan account is eligible for mortgage interest relief and will reactivate payment of tax relief. "Any arrears of tax relief due, back to May 1, will also be paid automatically through the TRS (tax relief at source) system," the Revenue said.
- Charlie Weston Personal Finance Editor
