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Losing mortgage interest relief due to arrears

  • 16-12-2015 10:30am
    #1
    Little CuChulainn
    Closed Accounts Posts: 7,624 ✭✭✭


    I've been told by EBS that if I go into next year in arrears then I lose full mortgage interest relief for the months I am in arrears (month and a half). I am aware that the relief is applied on interest paid but their assertion seems incorrect to me. Firstly, I thought that mortgage interest relief also applied in 2017 so would I not still get the benefit of interest relief in that year anyway? Secondly, if I have paid half the months payment do I still lose the full months relief? The EBS rep was very clear that I would but the documentation I read appears to say that it is applied proportionally based on interest actually paid. And since they clear interest before principal when you make a payment then I should get most of the relief for that month.


Comments

  • #2
    GFT
    Closed Accounts Posts: 207 ✭✭GFT


    You get relief on what you pay. If you aren't paying the mortgage then you don't get the relief.


  • #3
    Little CuChulainn
    Closed Accounts Posts: 7,624 ✭✭✭Little CuChulainn


    GFT wrote: »
    You get relief on what you pay. If you aren't paying the mortgage then you don't get the relief.

    Yes, I'm aware of that. My question is about what happens when you pay off your arrears. One EBS rep told me that if I have not paid off all arrears by 1st January then I will never be able to claim interest relief on those payments. He also told me that if I only make a part payment then I am entitled to no interest relief for that month. Both of these claims seem to be wrong.


  • #4
    Toots
    Administrators, Business & Finance Moderators, Society & Culture Moderators Posts: 16,921 Admin ✭✭✭✭✭Toots


    TBH if I were you I'd get on to Revenue and see can they tell you. You never know if the rep gave you the wrong info or not and it could be either a) because they made a genuine mistake or b) because they're trying to scare you into paying up.


  • #5
    Little CuChulainn
    Closed Accounts Posts: 7,624 ✭✭✭Little CuChulainn


    Toots wrote: »
    TBH if I were you I'd get on to Revenue and see can they tell you. You never know if the rep gave you the wrong info or not and it could be either a) because they made a genuine mistake or b) because they're trying to scare you into paying up.

    I did get on to revenue yesterday. They told me I am entitled to relief on interest paid, even if the full monthly amount is not paid. They also told me that once the mortgage is out of arrears you can make a claim for interest relief to be backdated, another thing EBS told me could not happen. When I rang EBS to tell them this, they guy told me that I was wrong and would be losing full interest relief for every month I was in arrears, even though it was only a few hundred euro overdue at the end of any month. I think it might be time to pen a letter to the regulator. Either someone is very confused or they are giving the wrong information to customers in arrears.


  • #6
    mickoneill31
    Registered Users Posts: 855 ✭✭✭mickoneill31


    Ask him to put it in writing.


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  • #7
    Arbiter of Good Taste
    Registered Users, Registered Users 2 Posts: 2,200 ✭✭✭Arbiter of Good Taste


    I think it's very clear from Revenue's website that you shouldn't totally lose the relief if you are making partial repayments


    http://www.revenue.ie/en/tax/it/leaflets/tax-relief-source-mortgage-interest-relief.html#section20


  • #8
    GFT
    Closed Accounts Posts: 207 ✭✭GFT


    Little CuChulainn wrote: »
    Yes, I'm aware of that. My question is about what happens when you pay off your arrears. One EBS rep told me that if I have not paid off all arrears by 1st January then I will never be able to claim interest relief on those payments. He also told me that if I only make a part payment then I am entitled to no interest relief for that month. Both of these claims seem to be wrong.

    If that is the case I'd make a complaint in writing. They're obliged to fully investigate and come up with a resolution by letter. It's very bad advice that you were given as interest relief is always given no matter how partial the payment (well up until 2017).


  • #9
    Little CuChulainn
    Closed Accounts Posts: 7,624 ✭✭✭Little CuChulainn


    Arbiter of Good Taste wrote: »
    I think it's very clear from Revenue's website that you shouldn't totally lose the relief if you are making partial repayments


    http://www.revenue.ie/en/tax/it/leaflets/tax-relief-source-mortgage-interest-relief.html#section20

    I mentioned that. He said they could not calculate how much of the payment was interest and how much was off the principal so they couldn't give partial interest. When I pointed out how ridiculous this was pushed him on it he then conceded that his department couldn't calculate it. It could only be calculated by the finance team. I really felt like there was a lot of misinformation and it was made all the worse by the condescending attitude that was directed at me. Eventually he resorted to threats of legal action.


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