Mortgage Interest Relief – TRS – Budget 2012 Changes

Mortgage Interest Relief –  – Budget 2012 (also known as TRS – Tax Relief at Source)

Prior to Budget 2012 – there were plans to cut the rates of Mortgage Interest Relief from January  2012 – but this has now been cancelled. TRS  will not be awarded on any  loans taken out after 31st Dec 2012.

Summary of TRS Rules
For mortgages taken out  before Jan 2004 – the TRS  entitlement expired in 2009.

Home loans taken out on or after 1 January 2004 and on or before 31 December 2012 will (subject to the exception below) qualify for tax relief up to the end of 2017 at the following rates and thresholds –

First time buyers
The tax relief is 25% for years 1 and 2; 22.5% for years 3,4 & 5 and 20% for years 6 and 7.
The maximum  amounts of interest paid qualifying for tax relief are :
€20,000 for individuals who are married, in a civil partnership or widowed
€10,000 for individuals who are single.
After year 7, the rates and thresholds for relief drop down to the rates  for non-first time buyers (Below)

Non-first time buyers
The tax relief on interest paid on qualifying home loans is 15%.
The maximum amounts of interest paid qualifying for tax relief are
€6,000 for individuals who are married, in a civil partnership or widowed
€3,000 for individuals who are single.

Free Business Accounts

Exception

For individuals who purchased their first principal private residence on or after 1 January 2004 and on or before 31 December 2008, the rate of tax relief  will, for the tax years 2012 to 2017, be 30%

Note:  The changes to cope with this new legislation have been delayed by some banks and may be carried out until  March or April

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