Tax Relief At Source (TRS) Mortgage Interest

In the December 1999 Budget, the Minister for Finance, Mr Charlie McCreevy, T.D. announced that Tax Relief at Source (TRS) would be introduced for certain tax allowances previously allowed through the Tax Free Allowance (TFA) System. From I January 2002, tax relief on interest payable on new and existing mortgages will no longer be given through the tax system but will instead be granted at source. This means that the tax relief element on the mortgage interest will be administered by the lending institutions and the relief will be “built into” the monthly mortgage repayment.

The TRS system will apply to secured mortgage loans - these are loans secured by the mortgage of freehold or leasehold estate or interest in a principal private residence. Any interest relief due on unsecured [non-mortgage] home loans will continue to be given through the tax system - generally by way of a claim at the end of the tax year.

TRS will simplify the administration of mortgage interest tax relief where the borrower will see the benefits of the relief in the monthly mortgage repayment. In addition, any future adjustment in tax relief (for example, arising from a change in interest rates) will be made automatically by the lender. The introduction of Tax Relief at Source also provides an opportunity to extend the tax relief on mortgage interest to persons whose taxable income up to now was insufficient to avail of the tax relief. These borrowers will be entitled to the tax relief from 1 January 2002.

Commencing on 18 June and continuing into July 2001, Revenue will be writing to each of the 450,000 borrowers who are at present claiming mortgage interest relief through the tax system. Where Revenue have the full mortgage details, Revenue will be writing to confirm the details with each borrower by letter and no further action is necessary unless some of the details need to be updated. For the remaining cases, the borrowers will be asked to supply details of their mortgage account and return the details to TRS Section, Collector-General, Sarsfield House, Limerick.

Help Line

Revenue is establishing a special TRS help line to assist borrowers with any queries they may have. The help line will be open from 8am to 8pm each week, Monday to Friday, commencing 18 June 2001. The Locall number is 1890 463626.

An explanatory leaflet on Tax Relief at Source (TRS) for Mortgage Interest is available from any Revenue Office and on the Revenue website at www.revenue.ie