Overview
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.
Qualifying conditions
You may qualify for the Mortgage Interest Tax Credit if you had:
- a qualifying loan in the years 2022 and 2023 or 2024
- the interest on the qualifying loan increased from 2022 to 2023 or 2022 to 2024, as the case may be
- and
- on 31 December 2022, an outstanding loan balance of between €80,000 and €500,000.
You can only apply for the Mortgage Interest Tax Credit if the property was:
- your principal private residence for 2022 and for the year(s) the claim is being made
- the principal private residence of a dependent relative
- or
- the residence of a spouse which they used to attend their employment.
You cannot claim the Mortgage Interest Relief Tax Credit if the property is not a qualifying property.
Your property does not qualify for the credit if it is:
- a residential property not compliant with Local Property Tax (LPT) obligations
- a residential property not compliant with planning permissions
- or
- a residential property acquired from a connected party, where the purchase price substantially exceeded the property value.
Courtesy of : https://www.revenue.ie