Tax Relief/Schemes

RELIEF FROM THE TAXMAN

Depending on where you buy a new home or apartment, you could qualify for tax relief, whether you are an Owner Occupier or an Investor who is buying a property to rent it out.

FOR PROPERTY INVESTORS
The property you buy could qualify for tax relief, if it is in a specially designated area. The way it works is that the construction cost of a residential property with a total floor area of not less than 38 sq.m. and not more that 175 sq.m. qualifies for Section 23 tax relief for investors. 

This enables investors who buy property in designated areas to claim tax allowances against their rental income.  Investors are also entitled to claim interest relief on the purchase of these properties against rental income. 

If the house is sold within10 years, there is a claw-back of the relief received and the total amount is passed on to the new owners in the remaining shorter period of time.
 

FOR OWNER OCCUPIERS
In certain areas, the construction cost of residential property with a total floor area of not les than 38 sq.m. and not more than 210 sq.m. qualifies for Owner Occupiers tax relief.  Owner Occupiers who buy properties in the qualifying areas are entitled to set off 5% per annum of the construction expenditure on qualifying properties over 10 years.  This is only where the buyer uses the house as their main residence.

If the house is sold within the 10 years, there is no claw-back of the relief received and the balance available is not passed on to the new owners.