How does the mortgage loan tax deduction work in Belgium?

In Belgium, the legislator has set up a specific tax framework to encourage access to home ownership. Since January 1, 2005, a new system known as the “basket system” has been in force for mortgage tax deductions. In practice, this means that in the same box of your tax return, you can deduct the amount of the repaid capital, the interest paid on your loan, as well as the premiums linked to the mortgage loan, mainly the outstanding balance insurance.

This basket system groups all these elements together and allows you to benefit from a tax reduction within an annual ceiling per person who subscribes to the mortgage loan. Properly understanding what can be included in this basket is essential if you want to optimize your fiscal situation and avoid leaving money on the table when you file your tax return in 2026.

The tax rules can seem complex at first glance, especially when you have to distinguish between the old and the new regimes, or when your family situation changes (marriage, cohabitation, children, etc.). By integrating these parameters early on, you can better choose your loan structure and the associated guarantees and, as a result, secure the maximum tax advantages over the long term.

What exactly can you deduct with your mortgage loan?

The tax deduction for your mortgage loan covers several elements. You can deduct the repaid capital, the interest you pay each year, and the insurance premiums directly linked to the loan, in particular the outstanding balance insurance. All these amounts are combined and subject to an annual ceiling of €2,120 per person who subscribes to the mortgage loan.

For the first ten years of your loan, this ceiling is increased by an additional €710, bringing the total to €2,830 per person. This increase allows new borrowers to benefit from a stronger tax boost at the time when their financial burden is often the heaviest. If your household has at least three dependent children, you can add a further €70 to the annual maximum, which increases the potential deduction.

These increases only apply during the first ten years and are only valid if you are the owner of a single dwelling that meets the conditions of a main residence. Once this period has passed, the deduction reverts to the base amount. It is therefore crucial to plan your financing strategy from the start, taking into account both your monthly budget and the tax leverage you can activate during these key years.

Conditions to deduct your mortgage loan from your taxes

To benefit from the tax deduction linked to your mortgage loan, several legal conditions must be met. First, the loan must relate to a single dwelling intended to be the family’s main residence. In other words, the financing must concern the home in which you and your family actually live, and not a second residence or a purely investment property.

Next, the loan must be secured with a mortgage and not with a simple personal or consumer loan. The term of the mortgage loan must also be at least 10 years. Shorter-term loans do not give access to the same tax mechanisms. Finally, the loan must be contracted with a credit company established in the EEA (European Economic Area), which generally includes recognized banks and credit organizations operating in Belgium.

Meeting all these conditions is essential to validate your tax deduction in 2026 and beyond. If in doubt about the eligibility of your project or your current loan, it may be wise to have your file analyzed in detail in order to confirm that you are indeed benefiting from all the tax advantages to which you are entitled.

What about loans taken out before January 1, 2005?

If your mortgage loan was taken out before January 1, 2005, it generally remains subject to the old legal regime. The rules and tax benefits applicable to these older loans may differ from the basket system currently in force for more recent contracts. In some cases, the old regime may still be advantageous, depending on the amount borrowed, the duration of the loan, and your family situation.

However, borrowers who fall under the old system often have the option of opting for the new basket-based deduction regime. This choice must be carefully considered, because once the option has been exercised, it becomes irrevocable. It is therefore important to compare the tax consequences over the remaining term of your loan, not only for the current tax year 2026 but also for the coming years.

Before changing regimes, it is strongly recommended that you carry out a detailed simulation that takes into account your income, your existing deductions, and the evolution of your loan balance. This will allow you to determine whether switching to the new regime offers a real long-term advantage or whether it is more beneficial to remain under the old legal framework.