Other reliefs

Home loan interest

Relief is given at source by the home loan provider. Loans taken out after 31.12.2012 do not qualify (s 244).

Relief depends on whether the homeowner is:

  • a First-Time Buyer (FTB),
  • a Non-First Time Buyer (NFTB),
  • married/widowed (M/W) or single (S), and
  • the year of the mortgage (Y1, Y2 etc).

FTBs: in Y1-Y7 maximum relievable interest is:

  • 2017: €20,000 (M/W) or €10,000 (S).
  • 2018: €15,000 (M/W) or €7,500 (S).
  • 2019: €10,000 (M/W) or €5,000 (S).
  • 2020: €5,000 (M/W) or €2,500 (S).

For FTBs the relief rate is:

  • 30% this relief rate remains for 2012 to 2020 for persons who became an FTB between 01.01.2004 and 31.12.2008.
  • 25% (Y1-Y2).
  • 22.5% (Y3-Y5).
  • 20% (Y6-Y7).
  • 15% (Y8+) – an FTB becomes an NFTB in Y8.

NFTBs: the maximum relievable interest is €6,000 (M/W) or €3,000 (S) and the relief rate is 15%.

Pension contributions

The personal contribution limits, whether through an employer scheme (s 776) or Personal Retirement Savings Account (PRSA), or a self-employed retirement annuity scheme (s 787), are:

  • aged under 30: 15% of earnings,
  • aged 30-39: 20% of earnings,
  • aged 40-49: 25% of earnings,
  • aged 50-54: 30% of earnings,
  • aged 55-59: 35% of earnings, and
  • aged 60 or more: 40% of earnings.

This 40% limit also applies to a sportsman or sportswoman.

Public servants get a deduction for Additional superannuation contributions (ASC).

The overall annual earnings limit for pension contributions is €115,000 (s 787B).

Unless you have a personal fund threshold (PFT), the standard fund threshold is €2,000,000 and the maximum tax-free lump sum on retirement is €200,000.

The table below indicates the maximum company funding allowed where normal retirement age is 65.

 

Current Age
Male Married
% of salary
Male Single% of salary
Female Married
% of salary
 
Female Single
% of salary
20 54 41 50 46
21 55 42 51 47
22 57 43 53 48
23 58 44 54 50
24 60 45 56 51
25 62 46 57 52
26 64 48 59 54
27 65 49 61 56
28 68 51 63 57
29 70 52 65 59
30 72 54 67 61
31 74 56 69 63
32 77 58 71 65
33 80 60 74 68
34 83 63 77 71
35 86 65 80 73
36 90 68 83 76
37 94 71 87 80
38 98 74 91 83
39 103 77 95 87
40 108 81 100 92
41 114 86 105 96
42 120 90 111 102
43 127 96 118 108
44 135 102 125 115
45 144 108 133 122
46 154 116 143 131
47 166 125 154 141
48 180 136 167 153
49 196 148 182 167
50 216 163 200 183
51 240 181 222 204
52 270 203 250 229
53 309 232 286 262
54 360 271 333 306
55 432 325 400 367
56 540 407 500 458
57 720 542 667 611

Covenants

To be tax effective, a covenant must be payable to:

  • a human rights body, or to a recognised college to carry out research, and exceed, or be capable of exceeding three years, or
  • an individual who is aged 65 or over, or permanently physically or mentally handicapped, and exceed, or be capable of exceeding six years.

The maximum income that be tax-effectively covenanted is 5%, but this limit does not apply to income covenanted to an individual who is permanently physically or mentally handicapped (s 792).

Stock relief (farmers)

This is given at 25% of the increase in stock value (s 666), 100% in the case of a young trained farmer (s 667B), and 100% to the extent that proceeds of compulsory livestock disposals are reinvested in replacement livestock (s 668).

Under EU State aid rules, the maximum combined stock relief and stamp duty relief claimable by a young trained farmer is €70,000.

Home renovation incentive

Provides an income tax credit of 13.5% of qualifying home improvement expenditure. It is paid over the two years following the year in which the work was carried out. The minimum qualifying expenditure is €5,000; the maximum is €30,000. Expires 31.12.2018 (s 477B).

Help to buy scheme

Provides for an income tax rebate for “first time purchasers” (s 477C). To qualify, the property must be purchased or built as a principal private residence. The mortgage must be at least 70% of the purchase price, or for self-builds, 70% of the valuation approved by the mortgage provider.

From 19.07.2016-31.12.2016 the maximum relief is the lower of;

  • €20,000 (purchase value between €400,000 and €600,000),
  • income tax paid by the claimant for the 4 years immediately preceding the year of claim, or  
  • 5% of the house price (or self-build valuation).

From 01.01.2017-31.12.2019, the same conditions apply but the valuation is between €400,000 and €500,000, with no relief granted on any property over €500,000.  

Note: Cash buyers do not qualify for the relief and you can not avail of the relief if you have previously bought, built or inherited a property, either individually or jointly with another party.

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