Budget 2024 introduced a temporary one-year Mortgage Interest Tax Credit for homeowners who have made payments in respect of a qualifying loan for a principal private residence.

This measure was introduced to help the many taxpayers who were hit with massive increases in the cost of their mortgages in 2023.

Relief will apply to homeowners with an outstanding mortgage balance on their principal private residence of between €80,000 and €500,000 on 31 December 2022.

The credit is available in respect of interest paid in the tax year 2023 only.

The relief operates by way of a tax credit against the taxpayer’s income tax liability for 2023 and is available to claim now!

The increase in mortgage interest paid qualifies for relief at the standard rate of tax and is capped at €6,250 per residence. This is equivalent to a maximum tax credit of €1,250 where all the eligibility criteria is met.

For example – if the interest portion of your mortgage payment was €1,000 a month up to July 2022 and increased to €1,200 a month by the end of the year because of the ECB rate hike, then the annual interest charged for 2022 was €13,000.  If the interest charged on your mortgage increased to €17,000 in 2023, this gives a difference €4,000.  20% of the difference will give the homeowner tax credit of €800.

Information required to claim the Mortgage Interest Tax Credit

To claim Mortgage Interest Tax Credit, we need the following:

  • Your Mortgage Interest Certificate(s) for 2022 & 2023
  • Confirmation from your Bank of the amount outstanding on the loan as at the 31st Dec 2022
  • Your LPT number
  • Confirmation that the mortgage is your principal private residence

In order to qualify for this relief, the taxpayer must also be compliant with Local Property Tax (LPT) requirements.

Important to know – The relief will be available on the increased interest paid on a homeowner’s mortgage in 2023 compared with what they paid in 2022 – not on the full Mortgage interest paid.