Even though the main benefit of exemption from stamp duty has been removed, there are still some tax benefits available for first time buyers. Simon Ball, Tax Consultant, wrote about this recently in the Irish Independent.
The Government has recently confirmed that they will leave the current mortgage interest relief for first time buyers in place until 31 December 2011. This means that if you are a first time buyer, and you purchase a property before the end of this year, you will continue to enjoy the interest relief taken directly off your mortgage.
The first time buyer mortgage relief is an incentive that is taken off your mortgage repayments. It is calculated at the source (by the bank) so that your monthly repayments are reduced. The example Simon Ball uses is that if you buy property for €300,000 you could save up to €25,200 in mortgage repayments over the seven year period that currently exists for mortgage relief.
The government is not planning to remove the relief entirely but bring down the rates of the relief over the seven year period – so you will not receive as much benefit from it in 2012. Different rates apply depending on whether you are single, married or widowed and you need to check this with your Solicitor or Accountant. There is also some other good news on the horizon in the new programme for government. It proposes to increase the rate for first time buyers who took out mortgages between 2004 and 2008 as a way of compensating for the property bust of the recession. Lets just wait and see if they implement that one…