In October 2022, you opted for a fixed interest mortgage for a span of five years. You’re wondering if you’re eligible for the mortgage interest relief that was prolonged into 2025 per the budgetary adjustment. Sadly, you are not, due to the specialisation of mortgage scheme you opted for.
Generically termed as mortgage interest relief, the mortgage interest tax credit was accessible to those who held a mortgage in 2022 with a remaining balance at the close of the year ranging from €80,000 to €500,000. This initiative was principally crafted to alleviate some financial distress for homeowners who had encountered increasing interest payments in the past years. This tax credit allowed for a claim of 20 per cent discrepancy between your mortgage interest expenditure in 2022 and that of 2023.
Originally, it was created as a singular cost of living measure scheduled to conclude at the end of last year. It has been now extended to continue operating this year, 2024, as you mentioned. The assessment is also based on the difference between your mortgage interest payment this year and that of 2022.
For mortgagors like yourself who took on a mortgage in 2022, the benefit is allotted fairly over the course of the year to take into account your lesser duration of mortgage interest in 2022. There is a limit in place; hence the maximum one can claim is 20 per cent of a raised mortgage bill as high as €6,250, valuing the scheme to a total of €1,250 to the affected mortgage holders.
The reason you’re ineligible lies in the fact that you opted for a five-year fixed rate mortgage. This implies that your mortgage interest has remained unchanged from October 2022 till October 2027. As your mortgage bill did not see an increase, you fail to qualify.
Concerning the delay in newborn benefit until January, it indeed seems harsh that children born before January are excluded. We are aware that you’re expecting a new addition very soon. Unfortunately, that’s the current situation.
The Government has demonstrated its capacity for abrupt policy changes in response to pushback on its budget proposals. Of interest in the 2025 Budget were two provisions specifically tailored towards prospective parents: a dual child allowance payment in November and December and an introductory infant supplement, essentially equating to a triple child benefit payment for new parents.
The stipulations for each were clear-cut. The child allowance commences a month after a child’s birth, meaning that a baby born this month would result in the parent’s entitlement to their initial child allowance on the second Tuesday of November, with no provision for retroactive payments.
This would imply that parents of babies born in December would be exempt from the double child allowance in December as they wouldn’t be eligible until January. They would also be disqualified from the newborn supplement, as budget documentation explicitly stated it applied solely to children born on or after the 1st of January.
This is how we initially reported the rules in our online post-budget Q&A session last Wednesday.
Predictably, this received backlash as many deemed it unfair. The Department of Social Protection, who are responsible for administering child allowances alongside other benefits, also received direct concerns from the public.
Within a day, the government was backpedalling. Heather Humphreys, the Minister for Social Protection, clarified that December-born infants’ parents would qualify to receive the triple newborn supplement amounting to €420.
Humphreys, having received numerous distressed contacts from women due to give birth in December, affirms no woman or infant will lose out. “Rest assured, the Christmas babies will be cared for,” she stated.
The specifics will be available upon the publication of the Social Welfare Bill, where all budget welfare actions are authorised. This is estimated to happen in the week commencing October 14th.
It appears likely that December babies’ parents, eligible for child allowance starting January, will benefit; however, those born in November might not be as lucky. They will profit from the double child allowance payment in December, but not the expected November bonus payment.
The impact is largely contingent on your child’s exact birth date.
Regarding landlord tax relief, if you’ve been the owner of a two-bedroom flat for the past dozen years, you may be wondering if you qualify for this relief for the next four years, assuming you keep it rented during this period.
This relief was introduced for individual landlords in the previous budget, but there was no reference to it this time. It’s officially known as the Residential Premises Rental Income Relief and provides tax cuts on certain rental income.
The maximum relief claimable this year is €600, to escalate to €800 next year, and €1,000 for 2026 and 2027. It is granted at a rate of 20 percent, and the rental profit cap for this year is €3,000, forecasted to increase to €4,000 next year and €5,000 for the two following years.
Please note, the relief targets only income tax, therefore, PRSI and Universal Social Charge (USC) will still apply to the same rental profits. It is also essential to be tax compliant and up to date with local property tax payments.
Michael McGrath, the then finance minister, confirmed upon its announcement that it would last for four years, and this remains true today. Any extension will most probably be defined towards the end of this period.
To take advantage, you must submit a tax return and if the property is sold or is no longer rented to a long-term tenant within four years of the initial claim, it will be negated.