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Mortgage Tax Relief. Any budget change?

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  • 19-12-2012 8:43pm
    #1
    Mikros
    Registered Users Posts: 503 ✭✭✭


    I received a lovely Christmas letter from the bank today informing me the revenue had cut my mortgage TRS by nearly €200 :eek:

    I'm a bit confused because as a first time buyer from 2004 to 2008 I thought the TRS was extended to 2017 in the last budget (in 2011).

    Nothing about my circumstances have changed - still living here, still a first time buyer. I'll be ringing the Revenue tomorrow to find out but just want to make sure there was no new changes to the TRS in this budget? Or any other guesses why they cut it?

    This has me seriously stressed, totally unexpected.


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    #2
    Senna
    Registered Users Posts: 8,800 ✭✭✭Senna


    AFAIK, if you bought between 2004 and 2008, you should be still getting TRS (30%??), it did not change in the last budget.
    The banks are constantly making mistakes regarding this, so ignore the letter from the bank and speak to Revenue tomorrow.
    What rate of TRS were you getting in 2012? I think it should have been 30%?


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    #3
    Mikros
    Registered Users Posts: 503 ✭✭✭Mikros


    Senna wrote: »
    AFAIK, if you bought between 2004 and 2008, you should be still getting TRS (30%??), it did not change in the last budget.
    The banks are constantly making mistakes regarding this, so ignore the letter from the bank and speak to Revenue tomorrow.
    What rate of TRS were you getting in 2012? I think it should have been 30%?

    Yeah it was 30%. Hopefully you're right with the mistake option, I'll be on to them tomorrow first thing. Some timing.


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    #4
    L1011
    Registered Users Posts: 68,798 ✭✭✭✭L1011


    Are you with Ulster? If so, are you sure its not a 200 quid TRS refund for their IT systems not being able to handle 30%? Few people in work had letters about that arrive today.


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    #5
    Mikros
    Registered Users Posts: 503 ✭✭✭Mikros


    MYOB wrote: »
    Are you with Ulster? If so, are you sure its not a 200 quid TRS refund for their IT systems not being able to handle 30%? Few people in work had letters about that arrive today.

    Ha, no I wish. Not with Ulster and definitely not a refund.


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    #6
    Rafloution
    Registered Users Posts: 664 ✭✭✭Rafloution


    OP are you with Haven?


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    #7
    Mikros
    Registered Users Posts: 503 ✭✭✭Mikros


    Rafloution wrote: »
    OP are you with Haven?

    No EBS.


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    #8
    cerberus81
    Registered Users Posts: 14 ✭cerberus81


    I got the same letter today from ebs, reduced by almost 200 down to €75 p/m no reason given only that revenue told them to do it! Should be fun trying to get an explanation from revenue tomorrow!


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    #9
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    cerberus81 wrote: »
    I got the same letter today from ebs, reduced by almost 200 down to €75 p/m no reason given only that revenue told them to do it! Should be fun trying to get an explanation from revenue tomorrow!

    whart year did you and the OP draw down your mortgage in ? My guess is 2006 and if so then that sounds right.

    as you would be due to get a reduced level of TRS from 2013 to 2017 in that case.


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    #10
    GetWithIt
    Registered Users Posts: 2,081 ✭✭✭GetWithIt


    Mikros wrote: »
    I received a lovely Christmas letter from the bank today informing me the revenue had cut my mortgage TRS by nearly €200 :eek:

    I'm a bit confused because as a first time buyer from 2004 to 2008 I thought the TRS was extended to 2017 in the last budget (in 2011).

    Nothing about my circumstances have changed - still living here, still a first time buyer. I'll be ringing the Revenue tomorrow to find out but just want to make sure there was no new changes to the TRS in this budget? Or any other guesses why they cut it?

    This has me seriously stressed, totally unexpected.
    TRS isn't at 30% ad infinitum, it reduces after a certain period of time.

    You say you were a FTB from 2004 to 2008. What does this mean?

    Is the 200 reduction per week, month, year? What does it represent in relation to your overall interest payments?


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    #11
    Mikros
    Registered Users Posts: 503 ✭✭✭Mikros


    cerberus81 wrote: »
    I got the same letter today from ebs, reduced by almost 200 down to €75 p/m no reason given only that revenue told them to do it! Should be fun trying to get an explanation from revenue tomorrow!

    That's the one! I'm not sure if it's a good thing or a bad thing that other people got it. All I know is the phones will be ringing in Revenue tomorrow...


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    #12
    Mikros
    Registered Users Posts: 503 ✭✭✭Mikros


    GetWithIt wrote: »
    TRS isn't at 30% ad infinitum, it reduces after a certain period of time.

    You say you were a FTB from 2004 to 2008. What does this mean?

    Is the 200 reduction per week, month, year? What does it represent in relation to your overall interest payments?

    The budget in 2011 extended TRS at 30% until 2017 for first time buyers. See here

    My mortgage was taken out in 2006 - the reduction of €200 is per month.


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    #13
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    Mikros wrote: »
    The budget in 2011 extended TRS at 30% until 2017 for first time buyers. See here

    My mortgage was taken out in 2006 - the reduction of €200 is per month.


    then you are due to get a reduced rate of TRS. Your mistaken Mikros TRS was extended but beyond 7 years it is at a reduced rate

    if you properly read that link

    http://www.revenue.ie/en/tax/it/reliefs/tax-relief-source-mortgage-rates.html and check the table attached you will understand that the letter you got is correct

    percentage is 30% but ceiling drops from €10,000 to €3,000 of interest allowable of relief ie a max trs of €900 per year or €75 per month


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    #14
    killers1
    Registered Users Posts: 1,443 ✭✭✭killers1


    The TRS ceiling reduces after 7 years by 50% so the reduction is correct unfortunately


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    #15
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    killers1 wrote: »
    The TRS ceiling reduces after 7 years by 50% so the reduction is correct unfortunately

    it drops by more than 50% it drops from €10,000 to €3,000 as Mikros can see form the link i put in my previous post


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    #16
    Mikros
    Registered Users Posts: 503 ✭✭✭Mikros


    D3PO wrote: »
    it drops by more than 50% it drops from €10,000 to €3,000 as Mikros can see form the link i put in my previous post

    Yeah I think you are right on closer reading. I had misread the "exceptions" section to mean the TRS went on to 2017 at full rate. Thanks for clearing it up

    Now I have to find an extra €200 a month. The word screwed comes to mind.


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    #17
    Mikros
    Registered Users Posts: 503 ✭✭✭Mikros


    This is very misleading...
    Exemption: Notwithstanding the rates of tax relief mentioned above, for individuals who purchased their first principal private residence on or after 1 January 2004 and on or before 31 December 2008, the rate of tax relief on the interest paid on the loan to purchase that property will, for the tax years 2012 to 2017, be 30%


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    #18
    killers1
    Registered Users Posts: 1,443 ✭✭✭killers1


    Mikros wrote: »
    This is very misleading...

    Look at the table below that exemption which explains it better. The rate is still 30% but the ceiling reduces from €10k to €3k


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    #19
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    Mikros wrote: »
    Yeah I think you are right on closer reading. I had misread the "exceptions" section to mean the TRS went on to 2017 at full rate. Thanks for clearing it up

    Now I have to find an extra €200 a month. The word screwed comes to mind.

    its a harsh one to have misread or misunderstood from a budgeting perspective. Im sure your not the only one who made it and is due for a shock but unfortunatly it is correct.

    it would have made a lot of sense for banks last year to have sent a letter to all their clients explaining it to them so they knew when and how the changes would impact them if they purchased between 2004 & 2008. I was aware of the changes hitting me but I'd venture that 60-70% of mortgage holders impacted were/are not.

    now it is everybodies responsibility to understand their own mortgage and TRS but it would be nice to think that banks would actually look to do something for their customers for once. Never gonna happen though was it !!


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    #20
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    Mikros wrote: »
    This is very misleading...

    its not really misleading. Its like everything you can pull out a line in many things and it has a different context than if the whole document is read.


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    #21
    Mikros
    Registered Users Posts: 503 ✭✭✭Mikros


    D3PO wrote: »
    its a harsh one to have misread or misunderstood from a budgeting perspective. Im sure your not the only one who made it and is due for a shock but unfortunatly it is correct.

    it would have made a lot of sense for banks last year to have sent a letter to all their clients explaining it to them so they knew when and how the changes would impact them if they purchased between 2004 & 2008. I was aware of the changes hitting me but I'd venture that 60-70% of mortgage holders impaced were not.

    now it is everybodies responsibility to understand their own mortgage and TRS but it woulod be nice to think that banks would actually look to do something for their customers for once. Never gonna happen though was it !!

    Indeed. I knew the TRS would end but only looked at the rate staying at 30% until 2017 - I didn't realise the ceiling dropped after 7 years irrespective. The headline figure from the budget last year was always about the rate lulling me into a false sense of security it seems.

    This leaves me in some serious bother. I wonder how many others will be getting a nasty shock.


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    #22
    Mikros
    Registered Users Posts: 503 ✭✭✭Mikros


    D3PO wrote: »
    its not really misleading. Its like everything you can pull out a line in many things and it has a different context than if the whole document is read.

    I'm not looking to blame it - just saying I found it misleading. It was certainly spun differently at the time.

    I think the addition of a line "the exemption for first time buyers from 2004 to 2008 does not extend to the maximum ceiling allowed after 7 years" would make it a lot clearer. Or indeed a letter in advance.

    Anyway not much use splitting hairs over it now.


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    #23
    GetWithIt
    Registered Users Posts: 2,081 ✭✭✭GetWithIt


    Mikros wrote: »
    Anyway not much use splitting hairs over it now.
    True. I think you heard what you wanted to hear. This isn't a criticism, it's human nature.

    I do think your bank could have been more helpful. These letters are presumably auto-generated. It wouldn't have killed them to spell out the exact details.


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