Taxes Consolidation Act 1997 section 244

Relief for interest paid on certain home loans

Section 244 provides for tax relief on interest paid by an individual on a loan used to purchase, repair, develop or improve a qualifying residence (mortgage interest relief), sets out the rates and ceilings of relief, and phases out the relief on a tapered basis from 2018 to 2020.

• Relief applies to interest on loans taken out between 1 January 2004 and 31 December 2012, used solely for the purchase, repair, development or improvement of a qualifying residence situated in an EEA state or the United Kingdom; the relief was abolished for new loans from 1 May 2009 but continued for these qualifying loans up to and including the tax year 2020.
• First-time buyers receive enhanced relief for the first seven tax years at rates of 25%, 22.5% or 20% (depending on the year of entitlement), with higher ceilings of up to €20,000 (married/widowed/civil partners) or €10,000 (single), while non-first-time buyers receive relief at 15% subject to lower ceilings; a special 30% rate applies to certain loans taken out between 2004 and 2008.
• From 2018 to 2020, the relief was tapered: qualifying interest and ceilings were restricted to 75% in 2018, 50% in 2019 and 25% in 2020, with 2020 being the final year of relief.
• Anti-avoidance rules deny relief for loans used to purchase a residence from a spouse or connected person at an inflated price, or to repurchase a previously disposed-of residence; transitional provisions allow relief on a former residence for up to 12 months where the individual is taking reasonable steps to sell it.