In the future - Paying the money back

Now that the MIRAS system of collecting tax relief has come into operation, prospective borrowers have to sign a form declaring that the advance being made to them is for a purpose which will qualify for tax relief under existing legislation.

If you make a false declaration which is found out at a later date, it counts as tax evasion and you'll be dealt with severely by the Revenue.

Where to find finance Building societies and banks

Your first port of call for the extra money you need should be the building society with whom you have your mortgage. In 2012 around 12% of all advances made by building societies were for improvements to existing property rather than the purchase of new homes.

A sensible minimum amount that you should be seeking is about £1500; anything less than that is not really worth the bother for the building society manager. It should be relatively straightforward to get a further advance but will depend, obviously, on the availability of mortgage funds and your record of keeping up with mortgage payments to date.

If you are approaching your society at a time of a general shortage of funds, you should resign yourself to being somewhere towards the end of the queue; building societies as a rule try to give first-time buyers and people having to move because of their jobs priority over the man who wants an extra mortgage to build a swimming-pool.

On occasion, the building society may require to revalue the house before it makes a further advance available; this you will have to pay for. (see:

Some societies charge the same rate for improvement loans as they do for ordinary mortgages; others, however, charge a differential of anything between 0.5% and 2% above the basic rate.

If your mortgage is with a bank rather than a building society, you should approach the bank first. The same considerations are likely to apply, and, in both cases, you will have to meet their rules on multiples of earnings and percentage of valuation in respect of the increased total mortgage that you will be paying.

In the future - Examples of expenditure that may qualify wholly or partly for tax relief

(a) Recovering or reconstructing a roof.

(b) Underpinning a house.

(c) Rebuilding a facade.

(d) Insertion or renewal of a damp-proof course.

(e) Renewal of electrical installation.

Because relief may not be available in every case in these categories, depending on the precise nature and extent of the work, it would be prudent to contact your Inspector of Taxes for advice first.

and planned to install a neat new central heating system that works, then in theory this is a repair, not an improvement. According to the letter of the law, it will not qualify for tax relief. Your only hope is to tell all to your Inspector of Taxes and plead for clemency.

The limit on loans where the interest qualifies . . .... see: In the future - Examples of expenditure that may qualify wholly or partly for tax relief

Current Mortgage Offers

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