Mortgage holders hit by rate hikes can now claim tax credit from Revenue
Homeowners hit by mortgage rates hikes last year will be able to claim tax relief on their payments from today.
The new scheme was announced in last October’s Budget and enables any mortgage holder that paid an increased rate last year to claim up to €1,250 in a tax credit.
PAYE workers can get the credit through Revenue’s MyAccount service. But they must file a 2023 tax return to do so.
It is estimated there are approximately 208,000 mortgages eligible for the relief. The projected cost is €125m on a once-off basis.
Claimants need to upload their certificate of mortgage interest for 2022 and 2023 and provide a confirmation of their mortgage balance on December 31, 2022.
The easiest way for PAYE taxpayers to claim the relief would be to log on to the Revenue website, said Finance Minister Michael McGrath. Self-assessed taxpayers will be able to claim the relief from mid-February.
Mr McGrath said: “The Government is acutely conscious of the impact increases in interest rates have had on many mortgage holders. In light of this, I introduced a temporary one-year, targeted mortgage interest tax relief scheme as part of Budget 2024.”
People on tracker rates, those on variables and people unable to fix because their mortgage was sold to a vulture fund are expected to benefit from the temporary tax credit.
PAYE workers do not generally have to submit a tax return but Revenue is increasingly trying to get all taxpayers to file returns.
Marian Ryan, consumer tax manager with Taxback.com, said: “There will be some people – particularly PAYE workers who have never had a reason to file a return before – who will be daunted at the prospect of filing a tax return and who will lose out on the mortgage interest relief they are entitled to.”
The relief applies to those with a mortgage of €80,000 to €500,000 at the end of last year. It covers changes to mortgage repayments over the course of last year, up to a maximum of €1,250.
Ms Ryan said given that ECB rates were increased 10 times, the relief would put much-needed money back into people’s pockets.
Meanwhile, non-bank lender Finance Ireland is reducing some of its mortgage rates. Cuts of up to 0.45 percentage points are being introduced across its suite of three-year and five-year fixed rate products. However, there is no cut in variable rates, which mortgage holders move on to when they come off a fixed rate.
Source: Charlie Weston, Irish Independent (31/01/2024)