Did you know that you can deduct your mortgage loan from your taxes? Here’s how to do it in a few steps…
- New rules in effect since January 1, 2005
Since January 1, 2005, the legislator has introduced a new system for deducting your mortgage loan, known as the basket system. In the same box of your tax return, you will be able to deduct the amount of the borrowed capital, the paid interest, and all the premiums related to the mortgage loan (mainly life insurance).
- What does this deduction cover?
You can deduct the repaid capital, the interest, and the insurance premiums, but the total of these amounts is capped at a maximum annual amount of €2,120 per person who took out the mortgage loan. For the first ten years, this amount is increased by €710, for a total of €2,830 per person. If you have at least three children, you can add an amount of €70.
These increases are only valid for the first ten years and only if you are the owner of a single residence.
- Conditions for deducting your mortgage loan from your taxes:
– The loan must be for a single house intended to be the main residence of the family;
– The loan must be secured with a mortgage;
– The loan term must be at least 10 years;
– The loan must be taken out with a credit institution established in the EEA (European Economic Area).
- What happens to loans taken out before January 1, 2005?
They remain subject to the old legal system. However, you have the option to switch to the new system, but this choice is irrevocable.
