The Finance Act 2023 introduced the Mortgage Interest Tax Credit. This tax credit is for taxpayers who have made payments in respect of a qualifying loan for a principal private residence. The Mortgage Interest Tax Credit was originally only available for the year 2023. However, in Finance Act 2024, it has been extended to include the year 2024.
The value of the credit, and all qualifying criteria, remain unchanged for 2024 claims. The relief is available to homeowners with an outstanding mortgage balance between €80,000 and €500,000 as of 31 December 2022.
The credit is available in respect of the increase in interest paid in 2023 over interest paid in 2022. It is also available in respect of the increase in interest paid in 2024 over interest paid in 2022. The amount qualifying for relief at the standard rate of tax (20%) is capped at €6,250 per property. This is equivalent to a maximum tax credit of €1,250.
How much can you claim?
The Mortgage Interest Tax Credit reduces your Income Tax liability for the tax years 2023 and 2024.
You must have an Income Tax liability to offset against to benefit from the Mortgage Interest Tax Credit. The credit does not provide relief against Universal Social Charge (USC) or Pay Related Social Insurance (PRSI).
You will not be able to fully utilise the credit if the credit due exceeds your Income Tax liability. However, you can receive a partial refund. This refund will be equal to your total Income Tax liability for the year.
Tax relief is granted at 20%. The maximum amount you can be refunded per year from the Mortgage Interest Tax Credit is €1,250 per residence.
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