Q&A:DOMINIC COYLE answers your personal finance questions

Q AS YOU know, there has been a recent change in the amount of tax deducted at source. This affects mortgages taken out seven years ago or more. Since I built a house, I drew down the mortgage in stages and only drew down the total amount about four years ago. How does this affect the amount of tax deducted at source? Mr K McG, Dublin

AI suppose the key issue is when you started claiming relief on the interest.

I understand from the Revenue Commissioners that, in general, when someone buys a site and builds a house on it for their own use, loan interest only qualifies for relief when the property is occupied. In that case, the seven years run from that date, not the date you initially started drawing down the money.

However, it is possible to get permission from Revenue to claim earlier if you can convince them you will use the house that will be built as your principal private residence. In this case, you can start claiming relief in the tax year in which you receive planning permission and the seven-year clock runs from when you first claim.

If you received the site as a gift and subsequently build on it, you can claim from the year in which you begin construction. Again, the seven years run from the date you first claim relief.

Granny flats and second homes

Q IN RESPONSE to a question by J McW last week, you stated that, as owner of a second house near his principal private residence and occupied free of rent by his son, he is liable to the €200 levy on the second house. I am in the same situation with a house situated about 500m from my home and occupied by my daughter and family.

I have been told by my local authority’s office that the €200 levy does not apply as it is covered by the granny flat exemption because there is no rent, it is within 2km of my residence, and utilities (eg electricity) are in my name.

They told me that if I were to charge rent, for example, then it would become liable for the levy. This seems to be at variance with your advice. If this is correct perhaps you would advise readers.

Mr P C, Dublin

AIt appears I might have been overly hasty last week in my assertion that a family whose son resides in a property "near by", which is owned by the father in addition to the family home (itself jointly owned), would trigger a charge under the non-principal private residence regime that has come into force this year.

Judging by the weight of correspondence that descended on me over the weekend, either the www.nppr.ie website outlining the charge and the underlying legislation, the Local Government (Charges) Act 2009, require detailed reading across the State, or we boast a disproportionate number of granny-flat owners.

I was clearly labouring under the old-fashioned concept that a “granny flat” is compact accommodation attached to a larger property. I suppose that, in an Ireland where chauffeur- driven limousines between airport terminals are an allowable expense for a minister, it is hardly surprising that the humble granny flat has upped sticks and can now rest in splendid isolation – up to 2km (1.24 miles) from the home to which it is “attached”.

Either way, it is the case that last week’s correspondent, Mr J McW, like yourself, will not have to pay the charge if his “second property” is within 2km of the family home. It is not clear from Mr J McW’s letter if this is the case.

Please send your queries to Dominic Coyle, QA, The Irish Times, 24-28 Tara Street, Dublin 2 or by e-mail to dcoyle@irishtimes.com.

This column is a reader service and is not intended to replace professional advice. Due to the volume of mail, there may be a delay in answering questions.

All suitable queries will be answered through the columns of the newspaper. No personal correspondence will be entered into.