Given it is early in the year many people will be receiving mortgage interest certificates from their mortgage providers in respect of the year ended 31 December 2024. It is important to remember to consider the potential to claim the recently introduced mortgage interest relief credit.

Background on Mortgage Interest Tax Credit

The mortgage interest tax credit was introduced in Finance Act 2023. The 2023 income tax year was the first year in which a claim may be made. This was extended in Budget 2025 to include the 2024 income tax year.

Eligibility and Calculation

The credit is available on the increase in mortgage interest paid in 2024 over mortgage interest paid in 2022 in respect of a principal private residence. It is available to taxpayers with mortgage balances of between €80,000 and €500,000 as of 31 December 2022. You should be able to request these interest and balance details from your mortgage provider.

Limits and Exemptions

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. Taxpayers are also required to comply with Local Property Tax (LPT) regulations. Only one credit is available per property.

Handling Early Mortgage Redemption

Even if you redeemed your mortgage in 2024, an adjustment will be required so that you can claim the relief on a pro-rata basis.

Application of the Tax Credit

The relief will be applied as a credit against the taxpayer’s income tax liability for 2024.

Conclusion

Staying informed about your LPT obligations and payment options is key to ensuring timely payments. Choose the method that suits you best and feel free to reach out should you need any further assistance or have additional questions!