The mortgage interest tax credit was announced in the 2024 Finance Bill. 

-

The credit is subject to a number of conditions, which once satisfied, will provide the taxpayer with a credit worth 20% of the increase in the interest paid in 2023 compared to the interest paid in 2022.  The maximum credit available is €1,250.

-

Some of the main conditions to be met are as follows:

• The mortgage balance must be between €80k-€500k as at 31 December 2022.
• The property on which the mortgage is held must be the sole or main residence of the claimant.
• There may only be one tax credit claimed per property. Where there is more than one claimant the credit must be apportioned (unless jointly assessed).
• For the purpose of the MITC, qualifying interest paid by a spouse or civil partner is considered qualifying interest of the claimant spouse or civil partner where joint assessment applies.
• All LPT obligations are up to date.
• The property must be in compliance with any planning permission requirements.

Example:

Mary has a mortgage balance on her principal private residence in Galway as at 31 December 2022 of €350,000. Her LPT obligations are up to date. She paid mortgage interest of €5,500 in 2023, and €2,500 in 2022. 

-

The increase in interest payments is €3,000 and her credit claimable will therefore be €600 (i.e. €3,000 x 20%).

-

While the above provides some insight to the newly announced tax credit, there are a number of intricacies when calculating the credit where the mortgage repayments were less than one year.

-

If you need any further information in respect of the credit please do not hesitate to contact a member of the tax team at Cooney Carey.  

-

Reach out to our team of experts for more information at info@cooneycarey.ie.