- 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 interest paid, as well as all the premiums related to the mortgage loan (mainly outstanding balance insurance).
- What does this deduction cover?
You can deduct the repaid capital as well as the interest and insurance premiums, but the total of these amounts is capped at an annual maximum of €2,120 per person subscribing to the mortgage loan. For the first ten years, this amount is increased by €710, making 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 are only valid if you own a single dwelling.
- Conditions to be able to deduct your mortgage loan from your taxes:
– The loan must be for a single house intended to be the family’s main residence ;
– The loan must be secured with a mortgage ;
– The loan term must be at least 10 years;
– The loan must be contracted with a credit company established in the EEA (European Economic Area)
- What happens to loans prior to January 1, 2005?
They remain subject to the old legal regime. However, you have the option to opt for the new system, but this option will then be irrevocable.