I took my mortgage out in October 2022; it was a five-year fixed-interest mortgage. Do I qualify for mortgage interest relief with this relief being extended in Budget 2025?
Ms K.A.
No, you don’t but that is down to the type of mortgage product you chose.
The mortgage interest tax credit – also loosely known as mortgage interest relief – was open to people who had a mortgage in 2022 which had a balance at the end of that year of anything between €80,000 and €500,000.
The credit essentially was designed to ease some of the financial pain for homeowners who saw their interest payments rise sharply over recent years. Under the credit, you could claim a credit of 20 per cent of the difference between your mortgage interest bill in 2022 and the bill in 2023.
Originally, it was a one-off cost-of-living measure that was designed to expire at the end of last year. It has, as you note, now been extended to include this year, 2024. Again, it is assessed on your mortgage interest bill this year against the bill for 2022.
For people like you, who had taken out a mortgage during 2022, the benefit was paid pro rata to reflect the fact that you did not have a full year of mortgage interest in 2022.
There is a cap, unsurprisingly. So you can claim the credit at 20 per cent on an increased mortgage bill of as much as €6,250, meaning the measure can be worth as much as €1,250 to mortgage holders affected.
So why do you not benefit? Well, you took your mortgage on an initial five-year fixed rate. That means your mortgage interest is the same from October 2022 to October 2027. As there was no increase in your mortgage bill, you do not qualify.
Missing out on newborn baby boost
Why is the newborn benefit being delayed until January? We are expecting in the coming weeks. Seems harsh that children born pre-January are excluded.
Mr J.M.
This is one of those things that shows just how fast the Government can shift tack in the face of budget criticism. There were two items in Budget 2025 of particular relevance to expectant parents: the double payment of child benefit in November and December, and the “baby boost”, which is effectively a triple child benefit payment for the parents on newborns.
The rules on both were quite clear. Child benefit kicks in the month after a child is born, so if you have a baby this month, you receive your first child benefit payment on the second Tuesday in November, and that payment is not backdated.
Under this reasoning, parents who had a child in December would miss out on the December double payment of child benefit because they would not be eligible for payment until January. But they would also lose out on the newborn baby boost because the budget documents made clear that this applied only to children who were born on or after January 1st.
And that is precisely how we reported on the measure in our post-budget online readers’ Q&A last Wednesday.
Unsurprisingly, people were in touch to say how unfair that seemed. And it is clear that they or others also went directly to the Department of Social Protection – which manages child benefit alongside other welfare payments – to make their feelings known.
Within 24 hours, the Government was U-turning, with Minister for Social Protection Heather Humphreys making clear that parents of babies who were born in December would be eligible to get the treble newborn baby payment – which amounts to €420.
Acknowledging that a lot of women whose babies are due in December had been in touch in the day after the budget, worried that their babies would be born too early for the grant, the Minister said she did not want to see any woman or baby miss out.
“Don’t worry, the Christmas babies will be looked after,” she said.
The precise details of this confirmation will be clear when the Minister publishes the Social Welfare Bill that enables all the budget welfare measures. It is expected to be published some time in the week beginning October 14th. It seems likely that it will benefit parents of December babies – who would ordinarily qualify for child benefit from January – but not for children born in November. They will benefit from the December double payment of child benefit, but not from the planned November bonus payment.
So how this affects you will very much depend on precisely when your child is born.
Landlord tax relief
I own a two-bed apartment which I have rented out for the past 12 years. Will I be entitled to claim this relief for each of the next four years provided I continue to rent it out during this time?
Mr W.W.
Landlord tax relief was something that was introduced in last year’s budget for individual landlords. No mention was made of it this time around.
Formally called the Residential Premises Rental Income Relief, it basically grants you relief from income tax on certain rental profits.
The limit on the amount you can claim this year is €600. That will rise to €800 next year and to €1,000 in both 2026 and 2027. The relief is granted at 20 per cent, so, in terms of rental profits, the upper limit for this year is €3,000, rising to €4,000 next year and to €5,000 in each of the subsequent years.
It applies only to income tax, so you will still be liable for PRSI and Universal Social Charge (USC) on the same rental profits. You also need to ensure you are tax compliant and up to date on your local property tax payments.
[ Renters, homeowners, landlords: Who did best out of Budget 2024?Opens in new window ]
When it was announced, the then minister for finance, Michael McGrath, confirmed it would run for the four years. That remains the case and any extension is only likely to emerge when we get towards the end of that period.
In order to claim the relief, you must file a tax return and if you sell the property within four years of making an initial claim, it will be clawed back. The same applies if the property remains in your ownership but is no longer rented out to a long-term tenant.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or by email to dominic.coyle@irishtimes.com with a contact phone number. This column is a reader service and is not intended to replace professional advice
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