There is now a temporary one-year Mortgage Interest Tax Credit. The credit is for taxpayers who have made payments in respect of a qualifying loan for a principal private residence. The mortgage interest tax credit is only available for the year 2023.
The relief is available to homeowners with an outstanding mortgage balance between €80,000 and €500,000 at 31 December 2022.
The credit is available concerning the increase in interest paid in 2023 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.
The Mortgage Interest Tax Credit is available to individuals who:
- had a qualifying loan in the years 2022 and 2023
- had the interest on the qualifying loan increased from 2022 to 2023
- on 31 December 2022, had an outstanding loan balance of between €80,000 and €500,000.
You are eligible to apply for the Mortgage Interest Tax Credit if the property was:
- your principal private residence for 2023
- 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 LPT obligations
- a residential property not compliant with planning permissions
- a residential property acquired from a connected party where the purchase price substantially exceeded the property value.
The Mortgage Interest Tax Credit reduces the amount of Income Tax that eligible individuals must pay in 2023.
You must have an Income Tax liability to offset against to benefit from the Mortgage Interest Tax Credit.
You will not be able to fully utilize 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 from the Mortgage Interest Tax Credit is €1,250 per residence.
How to Claim:
To claim the Mortgage Interest Relief, you must submit the following documents:
- Certificate of Mortgage Interest 2022
- Certificate of Mortgage Interest 2023
- confirmation of the qualifying loan balance at 31 December 2022.