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What’s a Principal Private Residence then?

Written by John O' Connor on July 1, 2010

Principal Private Residence

Principal Private Residence – Why it matters

What’s your Principal Private Residence?  This has massive tax implications across many areas of tax.  In our experience this causes a lot of confusion.

What is it

According to Paul Young, wherever he lays his hat, that’s his home.  There’s a bit of all of us who like that definition, but unfortunately Irish tax law is a lot more prescriptive.

According to Revenue, Your Principal Private Residence can be defined as

“An individual’s principal private residence at any time is the building or part of a building occupied by the individual as his or her only or main residence: during the period of 12 months ending with that time, or where the building was more recently acquired, from the time of acquisition to that time.”

My own individual definition is

“Your Principal Private Residence is the place you live.  If you have two homes, Revenue only allow that you live in one place at any one time, so you have to pick one.”

Income Tax FAQ’s

Q.  My family are in our mortgaged home in Dublin, but I am working in Cork the last 4 years and have rented a place there.  Can I claim Rent Relief?

It is advisable that you retain the home you own in Dublin as your Principal Private Residence as it can have implications for your insurance and mortgage.  Also, you can only choose 1 principal private residence. so you will lose your Mortgage Interest Relief if you look to claim Rent Relief.  You will also be required to register your property in Dublin as a second property and pay the €200 a year Property Tax for second properties.

Q.  My Son is in college in Limerick.  Can I claim rent relief as I pay for his rent?

Rent Relief is only available for your rent paid on your own principal private residence, so unfortunately you cannot claim Rent Relief for this.

Q.  I have a mortgage with my ex-partner but I have moved out.  I am still claiming mortgage interest relief, is this ok?

If you are not living in your principal private residence, then you cannot claim mortgage interest relief.  But if your ex is still living in the house, then they can continue to claim mortgage interest relief.  Depending on the size of the mortgage, your ex may still receive the same amount of mortgage interest relief as you receive when both of you were claiming.

Claiming mortgage interest relief with your ex may also affect your (and your ex’s) right to claim single parent tax credit – make sure you get this right.

There are also Capital Gains tax implications for your Principal private residence, which we will look at again.

If you have questions on your taxes, contact us via our website, email refunds@redoaktaxrefunds.ie or call us on 05991 73300

Posted Under: Mortgage Interest Relief, Rent Relief, Tax Refunds, Wednesday Club

12 replies to “What’s a Principal Private Residence then?

  1. Donal

    My partner and I live toghther and we pay 600 euro p.m on rent.The money comes out of my partners account however can we both claim rent relief.

    Reply

  2. shane

    Hi,

    I am my fiancee are moving abroad for two years due to my job. Can you answer the following

    (1) We were first time buyers so I know we lose the TRS for the few years we are aware but do we get the allowance back for the remainning couple of years of the 7 allowable years
    (2) What is the rental income taxed at – normal paye rates?
    any others points I should be worried about?
    Regards
    Shane

    Reply

  3. max

    Hi,
    I’m a student living in an apartment owned by a family member and I have been letting the spare room. I would like to know am I entitled to “rent a room relief” even though i am not the owner of the property??

    regards,
    Max

    Reply

  4. Sean

    Hi,
    My ex and I have an apartment under joint ownership. Following divorce she is going to stay in and I am about to secure another mortgage for a small apartment. This new mortgage will also be under joint ownership since she will put her name down to help me qualify for mortgage loan. This new property will be my new PPR; however will there be any tax implications for her? Does she have an investment in this new property?

    Reply

    1. Nerilie Watson

      Hi Sean
      Thanks for your comment.
      If you are no longer living in the original home, you need to contact your bank and cancel your Mortgage Interest Relief on this property (if you are still eligible for it). Your ex will still be able to claim MIR if she is still eligible as the property will remain to be her PPR.
      In terms of tax implications, there shouldn’t be any really for your ex. However, in terms of investment in the property, as this will effectively be a joint mortgage, you will both be liable to payment – i.e. if you should become unable to meet the repayments, your ex will be liable to pay them.
      We would recommend seeking legal advice just to clarify the terms prior to signing up to a joint mortgage.
      Regards
      Nerilie

      Reply

  5. Jim

    Hi
    Myself and my wife bought a new house last year. I retained my old house with all my existing posessions and as my official postal address thereby chosing it as my primcipal residence. My brother is in this house full time renting a room. I am thereby keeping the mortgage interest relief and dont require to pay tax as it is rent a room and it is a member of my family being my brother. Is this ok. I contacted revenue at the time stating that the property was not rented out as my brother was mainly resident there. This was ok’d by revenue at the time

    Reply

    1. Administrator

      Hi Jim, It’s not clear what the purpose of the new house is. Remember you can only have one principal private residence – I’d advise getting more advice on this, as if you get it wrong you will get stung for the Mortgage Interest Relief and a tax bill on the rent received.

      Reply

  6. Jo Russell

    I have seperated at least a year ago from my partner. We have a joint ownership on one property that was our principle residence. We bought another house some years later and moved into this, in another town, she is still living here with the kids. I’ve been staying on and off with friends/family but now think it is time to move back to the original house. As I am seperated now can I claim the original house as my primary residence?
    thanks

    Reply

    1. Administrator

      Hi Jo,
      The house you live in as your main residence is your primary residence. I’d just get you to make sure that if you have Mortgage Interest Relief on any of the houses, that it is being applied at the appropriate rate. The Main condition is you have to be living in it to claim the relief. If you do not live there, you lose the relief.

      Best wishes,
      John

      Reply

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