Revenue posted this eBrief recently to update you on changes in respect of deductibility of loan interest on borrowed money for property (purchase or repair) which is let to social housing tenants.
Read the full details below.
Tax and Duty Manual 4.8.6 “Deductibility of Loan Interest (section 97(2)(e)” (PDF, 137KB) has been updated to reflect changes to section 97 TCA 1997, introduced by section 15 Finance Act 2015, in respect of the deductibility of loan interest on borrowed money employed in the purchase, improvement or repair of rented residential property where the property is let to social housing tenants.
Section 97(2)(k) provides that landlords who undertake to rent residential property for a period of 3 years to tenants in receipt of social housing supports may, notwithstanding the general 75% interest restriction, deduct the balance of the interest accrued in each year of the 3 year period as an expense in computing subsequent taxable rents. The rolled-up interest balance (i.e. 25% for each of the 3 years) will be treated as accruing on the day after the end of the 3 year period.
In addition, Paragraph 9 of Tax and Duty Manual 7.1.32 “Rent A Room Relief” (PDF, 90KB) has been updated in relation to the registration of self-contained residential units with the PRTB.
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All the best,
The Team at Jefferson