From the 7th of April 2009 the tax relief for landlords on mortgage interest paid on debt used to purchase, improve or repair a residential property has been restricted to 75% of the interest incurred in the year. With effect from 1 January 2017 the amount restricted increases to 80%. The restriction will increase by 5% every subsequent year until the full 100% of interest incurred is allowable. Landlords will therefore be entitled to a full interest deduction with effect from 1 January 2021. For landlords renting properties to tenants availing of Housing Assistance Payment (HAP) scheme, 100% of the mortgage interest can be claimed on condition that an undertaking is given that the property be rented to HAP tenants for at least 3 years. Mortgage interest is claimed, subject to the above restrictions, in the first 3 years of the tenancy. The balance up to 100% of the relief can be claimed by the landlord in the year following the expiration of the three-year tenancy. Landlords should note that the availability of the interest deduction is still dependent on the tenancies being registered with the Residential Tenancies Board.

What questions do you have?

We are happy to help. Please post your comment below or call Eamonn Madden, Tax Manager at Cooney Carey, on 01 677 9000. Alternatively, send him an email: emadden@cooneycarey.ie To keep in touch, connect with us on LinkedIn.

If this article helped you, please share it with other businesses.