Mortgage Interest Relief REMOVES FTBs from the market

for the latter half the year . Silly side effect of using calendar years and not permitting rollovers . … relief.asp

Now if the average FTB gaff is c.€250k nationally and the average interest is 5% ( with discount in years one) the interest payable in a FULL year is €12, 500

If a couple buy in august , complete 1st september, then they only pay 4 months interest in that year and only get 1/3 of the interest relief. Nevertheless they use up a full years interest relief in those 4 months.

If an individual buys they use up a but more but are still shy of the €10k relief .

Its strikes ole 2Pack that to maximise your tax efficiency **an FTB should only buy at the beginning of the year **and that you have missed the (tax relief) boat for 2008 if you buy now.

A STB couple only gets about €5k relief in a year , if they bought on the 1st of september at €250k and 5% interest they can use up nearly all their tax relief by christmas. ( 12.5k /3 = 4.16k) .

An STB individual with €2.5k of relief can buy in October.

Therefore an FTB couple should buy in January if possible…or complete in January … to use up as much of their tax relief as possible

And individual FTB must buy BY March not AFTER March to get the full €10k

Any FTB buying from today on is sub optimal for tax relief.

Can we have an early selling season for FTBs so EAs ??

Excellent observation 2Pack, I wonder why the CFI’s Web site doesn’t point this out :slight_smile:

It can be solved by creating 3 tax year starts for mortgage tax , 1st Jan , 1st May and 1st Sept .

Full calendar year OR 2/3 vs 1/3 or 1/3 OR 1/3 vs 2/3 and that would be straightforward to administer.

That way your mortgage relief year can straddle 2 tax years and there is no ‘wrong’ time to buy as such.

The way its set up now will distort the market becuase its only optimal for an FTB to tackle the ladder in the early part of the year. Its too late already with 8 months to go, you are wasting valuable tax relief.

An FTB couple Could gain nearly €4,000 in Cash ( = €8000 Before tax) by delaying from December completion to January completion although in My example with a 250k price they only gain nearly 20% of 12500 odd ( less 1/12th) which is about €2200 and not €4000 .

There is no major built in incentive for a STB to delay because they can use up their entire tax allowance in only a small part of the year. The January - December distortion lens becomes even more intense at 6% mortgage rates which is where we are heading now .

On a 250k mortgage at 6% you pay €15,000 interest but ONLY IN A FULL YEAR and get 20% back over a tax year = €3000 .

Great point 2Pack, something every FTB should be aware of.

Shame no-one is. I didn’t know it - and I’ve never heard anyone mention it.

You will never hear this talked about or written about. So its impact is very marginal - regardless of financial importance.

Unless there’s a smart journo passing by who’d like to push a good story having just read you’re excellent observation … :smiley:

It’s slightly better than that. Rent relief also works on an annual basis. Rent for 1 month of the year and you get the entire relief.

Could this encourage Dubliners to holiday in Donegal/Galway/Kerry?

The rent might be free, but you’ll get ripped off when you order yourself a cup of tea from the local seaside coffee shop.

2Pack THIS IS MARKED. When this shows up in the media in the next few days they better credit you with it.

I discovered my parents and other parents of friends all got married by X date back in the day to get some kind of a tax refund or some such lark.

So what is the correlation of a tax scheme and the marriage & baby boom of the mid to late 70’s anyone got any insights :wink:

(is 2Pack on the case?)

One thing the “declining birth rate end of days” fanatics fail to account for is the scheer cost of raising kids while trying to pay off a house that is in negative equity.

By end June to get tax back on the “Gratuity”

None actually , relative affluence was a stronger factor. The “Gratuity” disappeared in the mid 1970’s, 1977 latest. Correlate that 8)

This doesn’t still exist by any chance does it?

:smiley: :smiley: :smiley: :smiley: groom1 :smiley: :smiley: :smiley: :smiley:

It was effectively outlawed by a few specific acts in 1977 including the Employment Equality Act and another I think .

My folks give out shite to my younger brother every Xmas - he was born on 7th April and cost us a ‘fuckin fortune’ ! :laughing:

(Apparently[pardon pun] missed the cut by a day or two !)

Maybe it was the old 5th April tax year - I’ve been told but can’t remember ! Affluence of Incahol etc. I’ll remember next time !

FTB’s are being screwed by everybody. Surely there must be some campaign or impartial advice website that can advise them about such pitfalls.

Critical observation by 2pack - nice one. Any more pearls about to divulge their wisdom??


impartial advice ?? The site, correct if I am wrong, is advice from the CFI :unamused: . Thats like taking swimmimg lessons fom a rock

Hence the rolleyes! But you’re absolutely right!