Confused about Mortgage Interest relief??

There has been alot of confusion over Mortgage Interest Relief since the budget but even more so in the last few days. Confusion has increased because it has now come to light that some who do qualify for the interest relief will loose it temporarily. The reason for this is that it is going to be hard for the revenue to clarify whether or not certain customers qualify for the relief.

The change in the budget is not that confusing in itself. Basically anyone who has had a mortgage for longer than seven years will no longer qualify for tax relief. The Revenue has clarified the Mortgage Interest Relief Budget changes on their website.

Haven Mortgages (EBS Group) have also clarified how some people who will still qualify for the relief might loose it temporarily while the changes are introduced.

Haven Mortgages Statement

"As you may be aware, the recent Budget introduced changes to Tax Relief at Source (TRS) which will affect some mortgage cusotmers. From the 1st May 2009 all qualifying mortgages will receive TRS for the first seven years of the mortgage only.

Consequently, to allow the Revenue to administer this change in the TRS rules, TRS has been temporarily ceased for all non-first time buyers with immediate effect. The Revenue has committed to carry out a review of all affected accounts and will, at a later date, reinstate TRS on all accounts that continue to qualify for relief.

For example, customers who may have switched lenders in the early years of their mortgage or purchased a second property are no longer considered first time buyers by the Revenue - but will retain the balance of TRS still available to them until the seven year period has expired - this category of customer will have TRS reinstated as part of the Revenue's review at a later date (to be notified)."

Haven Mortgages clarification of this matter is very welcome and helpfull. In a seperate statement the revenue have confirmed that, "the relief at source should be reactivated in June where an entitlement is established, and that any arrears will be credited to customers accounts automatically"

Over the next month there are going to be alot of mortgage holders who will loose their Mortgage Interest Relief temporarily. With all the other recent tax increases this extra burden has come at a bad time for hard hit mortgage holders.