More than 180,000 owners failed to claim up to €1,250 tax relief which aimed to soften the blow of the climb mortgage interest rate. As a group, they could lose up to €120 million.

In October 2023, the then Minister of Finance Michael McGrath introduced a one-off temporary mortgage interest relief tax credit for homeowners who had been hit by six interest rate hikes since the start of the month. European Central Bank (ECB) in 2023, leading many people to pay more than €4,000 per year more in loan repayments by the end of 2023 compared to 2022.

At the time, the minister suggested that the relief would benefit 208,000 people, including follow-up mortgage holders, those benefiting from standard variable rates and people whose loans have been taken over by vulture funds, beneficiaries.

Tracker holders – numbering around 180,000 – are the cohort who have seen the cost of their home loans rise the fastest, with the rates they pay always moving in tandem with the rates offered by the ECB.

Although the budget decision was widely praised when it was announced more than a year ago, people have been very slow to take advantage of it. At the end of last month, only 26,859 people had requested a tax refund from Income.

This represents about 12 percent of those who Ministry of Finance expected would be admissible. In June, the number of borrowers applying for relief was just under 23,000, suggesting the pace of claims has fallen sharply since the summer.

According to Revenue figures, those who applied for the credit received reductions of just over 18 million euros in total, or 670 euros per borrower. If the remaining 181,000 people considered eligible applied at the same level, the amount they would get would exceed €120 million.

The figures could change in light of the declarations of self-assessed taxpayers. Information relating to complaints made by self-assessed taxpayers is not yet available. These taxpayers were required to submit their 2023 returns by the end of last month – or by November 14 for those submitting their returns online.

A recent survey conducted by Taxback.com found that 700 of 1,400 respondents had never heard of the mortgage tax credit, suggesting that a lack of knowledge may be at least partly responsible for the low uptake of the tax credit.

Some also criticized that making a claim was too complex, with claimants having to file a tax return with the taxman, a process most PAYE workers are unfamiliar with.

The credit is available to taxpayers for their family home, whose outstanding mortgage balance was between €80,000 and €500,000 as at 31 December 2022. It is paid at a rate of 20 per cent of the increase in the mortgage bill. owner’s interest in 2023 over 2022, up to €1,250.

While it was initially presented as a one-off measure of the cost of living, it has since been expanded to include this year – again measuring this year’s mortgage interest bill against the 2022 figure – in the government’s budget. last month.

Taxback.com says mortgage interest relief isn’t the only tax credit people are leaving behind. Even though approximately 400,000 tenants are eligible for rent tax creditfewer than 100,000 claimed it last year.

For the 88% of homeowners who could benefit from the tax break but have not yet applied for it – and for tenants who have not yet claimed their credit – there is still time to apply for 2023, with a limit to request a tax refund. for PAYE and self-assessed individuals, set at four years.

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