I propose to take Questions Nos. 214, 218 and 220 together.
The position is that Finance Act 2023 introduced the temporary one-year Mortgage Interest Tax Relief that I announced on Budget day. The tax relief will be available to taxpayers in respect of their principal private residence in the State where the outstanding mortgage balance was between €80,000 and €500,000 as of 31 December 2022, and the taxpayer is compliant with Local Property Tax requirements. The relief also extends to a qualifying property located in the State which is the sole or main residence of the individual’s former or separated spouse or civil partner or a dependent relative. The tax relief will be available at the standard rate of income tax and is based on the increase in interest paid in 2023 over interest paid in 2022. The value of the relief will be equal to the lesser of 20 per cent of this excess interest figure, or €1,250. 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.
A taxpayer will be able to make a claim to Revenue for this tax relief by filing a 2023 Income Tax Return. Revenue provides a free and easy to use facility to file an Income Tax Return for all taxpayers. For PAYE taxpayers this is done through myAccount, with self-assessed taxpayers using ROS.
The taxpayer will be required to submit the following documents at the time the claim is made:
• Certificate of Mortgage Interest 2022,
• Certificate of Mortgage Interest 2023, and
• Confirmation of mortgage balance at 31 December 2022.
I am advised by Revenue that they anticipate the functionality for claiming the tax relief as part of filing an Income Tax Return for PAYE taxpayers will be available from 31 January 2024, with the facility for self-assessed taxpayers available in mid-February 2024.It should be noted that tax relief will be available against a taxpayer’s Income Tax for 2023. In this regard, the claimant must have an Income Tax Liability in 2023 to benefit from the relief. If the relief due exceeds the claimant’s Income Tax Liability, then the relief will apply to the extent that it reduces the claimant’s Income Tax liability for 2023 to nil.
Individuals who are in receipt of the State pension will, generally speaking, be entitled to other tax credits. For example, the Employee Tax Credit, the Age Tax Credit and the Personal Tax Credit, so if the State pension is their sole income for 2023, then by virtue of the suite of tax credits available to them an Income Tax Liability for 2023 will not arise. Detailed guidance material regarding mortgage interest relief, to include the claims process is included in Revenue’s Tax and Duty Manual Part 15-01-01B, available at: www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-15/15-01-11B.pdf
