First time home buyers who got mortgages with Ulster Bank during Ireland’s peak of economic growth are yet to have the full rate of interest relief applied to their repayment schedules. Some 38,000 couples and individuals who purchased their first home between the years of 2004 and 2008 were entitled to an increased rate of tax relief thanks to last December’s Budget.
In that Budget, anyone who drew down a mortgage between that four year period were entitled to a 30% rate of tax relief as opposed to the 25% currently available to first time buyers which will be abolished at the end of the year. But almost a year on, Ulster Bank customers entitled to the higher rate are still waiting for the increased rate to be applied on their mortgage accounts.
The lender has cited difficulties with upgrading its IT system so that they can apply the 30 percent rate to relevant accounts as their current system only allows for a maximum rate of 25 percent. Indeed, the bank is not a stranger to having computer problems. It was at the centre of technical issues resulting in most of its customers not being able to access their accounts for the month of June.
However, resolving the outstanding issue of applying the higher rate of mortgage interest relief for first time buyers is going to take Ulster Bank more time due in part to the technical issues experienced during the summer. The software needed to apply the higher rate to eligible mortgage holders will not be in place until March 2013. It has informed the Revenue Commissioners of the time frame who have agreed to retrospectively apply the extra 5% to eligible borrowers when the IT program is fully operational.