Will I lose the mortgage relief for my house if I buy a second property?
Article ID: 449 | Last Updated: Thu, Jan 22, 2015 at 10:01 AM
If I buy a second home, will I automatically stop receiving my tax refund from the mortage interest on my first house? Or will I only just not get any interest refund from my second home?
You can get mortgage relief for your main residence, so the property in which you are living yourself. This will continue when you buy a second property. For the second property you won’t get relief (unless you bought it with the intention to live in it within 3 years, but first need to renovate it).
If you start living in the second property then it becomes your main residence. Consequence is that you lose the right to deduct the mortgage interest for the original first property, unless you put the property for sale and nobody is living in it (not even for free). You can then continue to deduct the mortgage interest for this property for another 3 years.
Both periods start from 1 January of the following year. So if you move to another house on 1 November 2013 and your old house is for sale on that date (and nobody else is living there), the mortgage interest for the old house can still be deducted for the remaining part of 2013 plus the following 3 full calendar years, on top of the deduction of the mortgage interest for the new house.