Dáil Éireann Debate, Tuesday - 14 November 2023
122. Deputy Niamh Smyth asked the Minister for Finance to outline the details of mortgage relief, as announced in Budget 2024; when people should apply; the details of how to apply; and if he will make a statement on the matter. [49371/23]
View answerAs the Deputy will be aware, Finance (No. 2) Bill 2023 introduces the new Mortgage Interest Tax Relief that I announced on Budget day.
The relief will be a temporary one-year tax credit for taxpayers who have made mortgage interest payments in respect of a qualifying loan for a principal private residence, where a number of conditions are satisfied.
Subject to enactment of the legislation, the tax credit will be available in respect of a qualifying property located in the State which is the sole or main residence of the individual, the individual’s former or separated spouse or civil partner or a dependent relative.
The credit will be available in respect of the 2023 tax year only and is based on the increase in interest paid in 2023 over interest paid in 2022. This excess interest figure will be subject to a cap of €6,250 and will qualify for relief at the standard rate of income tax (20%). This means that the maximum tax credit will be €1,250 per property. Where the interest payments made in respect of either the 2022 or 2023 tax years are not for a full year, pro-rating of the relief will apply, to ensure interest is applied on a period of equivalence basis and that the cap is adjusted accordingly. Revenue’s systems will carry out the calculation of the relief at the point of claim.
Certain other conditions will apply to this measure, for example:
• The property subject to the claim must be compliant with Local Property Tax obligations,
• The outstanding mortgage balance as of 31 December 2022 must have been between €80,000 and €500,000, and
• A claim for the tax credit will be required.
A taxpayer will be able to make a claim to Revenue for this tax credit (applicable for the 2023 tax year) by filing a 2023 Income Tax Return. I am advised by Revenue that this claims facility will be operational by the end of January 2024.
Finally, Revenue will publish detailed guidance on this measure before the end of the year, setting out the conditions for relief and how to claim the tax credit.
