Michael McGrath (Cork South Central, Fianna Fail)
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Mortgage Interest Tax Relief is available for home owners with an outstanding mortgage balance on their principal private residence of between €80,000 and €500,000 on 31 December 2022.

It is available at the standard rate of income tax and is based on the increase in interest paid in 2023 over interest paid in 2022. The value of the relief will be equal to the lesser of 20 per cent of this excess interest figure, or €1,250. This means that the maximum relief will be €1,250 per property.

Where the interest payments made in respect of either the 2022 or 2023 tax years are not for a full year, pro-rating will apply, to ensure interest is applied on a period of equivalence basis and that the cap is adjusted accordingly.

In order to avail of the relief, the taxpayer must file a 2023 Income Tax Return and upload their certificate of mortgage interest for 2022 and 2023, and confirmation of their mortgage balance at 31 December 2022. Furthermore, the taxpayer must have paid income tax in 2023 and be compliant with Local Property Tax requirements. The relief operates by way of a credit offset against taxpayer’s income tax liability for 2023.

In relation to the particular situation outlined by the Deputy, Revenue have advised me that it is assumed that the person in question qualifies for Transborder Workers Relief (TBWR), as provided for under section 825A of the Taxes Consolidation Act 1997. TBWR effectively removes the earnings from a qualifying employment from liability to Irish tax where foreign tax has been paid on same (and that tax is not refundable). This relief is generally claimed where the foreign income tax rate is lower than the Irish income tax rate. Where an individual chooses to claim TBWR and has no other source of income, he or she will have no further Irish income tax liability. However, where an individual chooses not to claim TBWR, he or she may benefit from claiming the Mortgage Interest Tax Credit, depending on his or her circumstances.

In summary, a claimant must have an Irish income tax liability to benefit from the credit. If a claimant has no tax liability (for whatever reason), he or she will not benefit from the credit. If the credit due exceeds the claimant’s income tax liability, the credit will apply to the extent that it reduces the claimant’s income tax liability for 2023 to nil.

Further detailed guidance regarding the Mortgage Interest Tax Credit is included in Revenue’s Tax and Duty Manual Part 15-01-01B available at: www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-15/15-01-11B.pdf

Further detailed guidance on the TBWR is available in Revenue’s Tax and Duty Manual Part 34-00-06 available at: www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-34/34-00-06.pdf