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Mortgage Interest Relief (Tax Relief at Source - TRS)

  1. Overview
  2. What is a qualifying mortgage loan?
  3. Do you qualify for Mortgage Interest Relief?
  4. What type of loan does not qualify?
  5. How do you claim Mortgage Interest Relief for 2020?
  6. How do you calculate Mortgage Interest Relief?
  7. Thresholds and rates

Thresholds and rates

Mortgage interest relief, which was due to cease at the end of 2017, was extended to the end of 2020 but on a tapered basis. This applies to all those who can claim the relief.

No relief will be available from 1 January 2021 onward.

There will be a reduction in the percentage of interest that will qualify for relief as follows:

  • 75% of the existing relief into 2018
  • 50% into 2019
  • 25% into 2020.

The interest thresholds or maximum amount of interest allowable for the three years will also be reduced.

Ceilings for the years 2018 - 2020 per Finance ACT 2017 changes. The ceilings relate to loans taken out between 2004 - 2012.

First Time Buyers - Loans taken out 2004 - 2012
Tax yearMarried, Civil Partner or widowedSingle
2018 €15,000 €7,500
2019 €10,000 €5,000
2020 €5,000 €2,500
Non-First time buyers - loans taken out 2004 - 2012
Tax yearMarried, Civil Partner or widowedSingle
2018 €4,500 €2,250
2019 €3,000 €1,500
2020 €1,500 €750

The following examples show how to calculate your mortgage interest relief from 2018 onwards.

  • Example 1

    Non-first time buyers who bought house between 1 Jan 2009 and 31 Dec 2012.

    Alan and Amy bought their 2nd home in 2009 for €400,000. They are paying interest of €12,000 per year.

    As they are non-first time buyers they are on the 15% rate and the threshold on interest is €4,500 in 2018.

    They will get relief of €4,500 x 15% = €675 in 2018.

    In 2018 the threshold will be 75% of the 2017 level: €6,000 x 75% = €4,500. Their relief will be €4,500 x 15% = €675.

    In 2019 the threshold will be €6,000 x 50% = €3,000. Their relief will be €3,000 x 15% = €450.

    In 2020 the threshold will be €6,000 x 25% = €1,500. Their relief will be €1,500 x 15% = €225.

    There will be no relief in 2021.

  • Example 2

    First time buyers who bought first house between 1 Jan 2004 and 31 Dec 2008.

    Sarah and Rob bought their first home in 2008 for €225,000. They are paying interest of €4,000 per year.

    As they have the house more than seven years they no longer qualify for the first time buyer thresholds. The maximum threshold on relief is therefore €4,500 in 2018.

    However, it was bought between 1 January 2004 and 31 December 2008 so it does qualify for the 30% rate.

    In 2018 their relief will be limited to the lesser of a threshold of 75% x €6,000 = €4,500 or 75% of the actual interest paid, that is 75% of €4,000 = €3,000. Their relief will be €3,000 x 30% = €900.

    In 2019 the threshold will be reduced to 50% of €4,000 = €2,000. Their relief will be €2,000 x 30% = €600.

    In 2020 the threshold will be reduced to 25% of €4,000 = €1,000. Their relief will be €1,000 x 30% = €300.

    There will be no relief in 2021.

  • Example 3

    First time buyers who bought house in 2012.

    Finbar and Aileen bought their first home in 2012 for €280,000. They are paying interest of €7,000 per year.

    They qualify for the first time buyer threshold and rates up to 2018.

    In 2018 they will be in year seven and the rate will be 20%. Their relief will be (€7,000 x 75%) x 20% = €1,050.

    In 2019 they will be in year eight and the rate will be 15%. Their relief will be (€6,000 x 50%) x 15% = €450.

    In 2020 their relief will be (€6,000 x 25%) x 15% = €225.

    There will be no relief in 2021.

  • Example 4

    Non-first time buyer with second home.

    Danielle bought her second home in 2009 for €120,000, however she re-mortgaged in 2011 and purchased a holiday home. Her mortgage is now €150,000, only 80% of her loan qualifies for Mortgage Interest Relief. She is paying interest of €6,000 per year. Her qualifying interest is 80% of the interest she pays each year: €6,000 x 80% = €4,500.

    In 2018 her relief will be limited to the €2,250 threshold. She will get €2,250 x 15% = €338.

    In 2019 her relief will be limited to the €1,500 threshold. She will get €1,500 x 15% = €225.

    In 2020 her relief will be limited to the €750 threshold. She will get €750 x 15% = €113.

    There will be no relief in 2021.

  • Example 5

    First time buyer who bought house between 1 Jan 2009 and 31 Dec 2012.

    John bought his home in 2009 for €250,000. He is paying interest of €7,500 per year.

    As he has the house more than seven years he no longer qualifies for the first time buyer rates and thresholds.

    He is on the 15% rate and the threshold on interest is €3,000.

    In 2018 his relief will be 75% of the 2017 level: (€3000 x 75%) x 15% = €338.

    In 2019 his relief will be 50% of 2017 level: (€3000 x 50%) x 15% = €225.

    In 2020 his relief will be 25% of 2017 level: (€3000 x 25%) x 15% = €113.

    There will be no relief in 2021.

  • Example 6

    First time buyer who bought between 1 Jan 2004 and 31 Dec 2008.

    Grace bought her home in 2008 for €225,000. She is paying interest of €4,500 per year.

    As she has the house more than seven years she no longer qualifies for the first time buyer thresholds.

    However it was bought between 1 January 2004 and 31 December 2008 so it does qualify for the 30% rate.

    In 2018 her relief will be reduced to 75% of the 2017 threshold: (€3,000 x 75%) x 30% = €675.

    In 2019 her relief will be reduced to 50% of the 2017 threshold: (€3,000 x 50%) x 30% = €450.

    In 2020 her relief will be reduced to 25% of the 2017 threshold: (€3,000 x 25%) x 30% = €225.

    There will be no relief in 2021.

Thresholds and rates up to the end of 2020

The thresholds on the amount of interest paid that qualify for tax relief depend on whether you are:

  • married, in a civil partnership, or single
  • a first time buyer.

First time buyer

If you are a first time buyer, your threshold will reduce after seven years of claiming the relief.

For an individual, it reduces from €10,000 to €3,000.

For a those who are married, in a civil partnership, widowed or a surviving civil partner, it reduces from €20,000 to €6,000.

The tables below highlight the rates of relief from 2010. The rates prior to this date can be found in Tax and Duty Manual Part 08-08-08, in the Further guidance section.

Rates of relief that apply for loans taken out between 2004 - 2012.

First time buyers - Loans taken out 2004 - 2012 (table covers the years 2010 - 2012)
Tax YearMarried/Civil Partner /widowedSingle

Finance Act 2010

Loans taken out

1/1/2004 – 31/12/2011

(note FA 2012 changes)

Relief @:

- 25% (year 1 and 2)

- 22.5% (year 3, 4 and 5)

- 20% (year 6 and 7)

Relief @:

- 25% (year 1 and 2)

- 22.5% (year 3, 4 and 5)

- 20% (year 6 and 7)

Finance Act 2012

Loans taken out

1/1/2012 – 31/12/2012

Relief @:

- 25% (year 1 and 2)

- 22.5% (year 3, 4 and 5)

- 20% (year 6 and 7)

Relief @:

- 25% (year 1 and 2)

- 22.5% (year 3, 4 and 5)

- 20% (year 6 and 7)

Finance Act 2012

Loans taken out 2004 - 2008

inclusive that are used to

purchase a person's first principal private residence (PPR)

or second PPR where first

PPR was purchased after 1/1/2004

 Relief @ 30% from 2012 onwards Relief @ 30% from 2012 onwards

Non-first time buyer

If you are a non-first buyer, the ceiling for an individual is €3,000.

For those who are married, in a civil partnership, widowed or a surviving civil partnership, it is €6,000.

Non-first time buyers - Loans taken out 2004 - 2012 (table covers the years 2010 - 2012)
Tax yearMarried, Civil Partner or widowedSingle

Finance Act 2010

Loans taken out 1/1/2004 - 31/12/2011

(note FA 2012 changes)

 Relief @ 15% Relief @ 15%

Finance Act 2012

Loans taken out 1/1/2012 - 31/12/2012		 Relief @ 15% Relief @ 15%

Finance Act 2012

Loans taken out 2004 - 2008 incl. that are used to purchase a person's principal private residence (PPR) or second PPR where first PPR was purchased after 1/1/2004

 Relief @30% from 2012 onwards Relief @ 30% from 2012 onwards

 

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