Homeownership: deductible items!
The interest on the loan of your house is one of the most commonly used deductible items. Most of the time, it regards the mortgage interest. However, it can be another type of loan to arrange the financing of your house. We already wrote about the family bank, which is a well-known alternative to the mortgage.
But in addition to this interest, here are more types of deductible items regarding homeownership. We discuss them in this article.
In general, the rule applies that the costs incurred to finance the owner-occupied home are deductible once: in the year you bought the house.
Sometimes, it happens that you make extra repayments on your mortgage or that you refinance your mortgage. In these cases, you have to pay penalty interest. The reason for this is that the lender misses out on interest income. The good news is that you may deduct this penalty interest from your taxable income in box 1.
To avoid misunderstandings, we also mention the most common costs that are not deductible in this article.
- We already mentioned which notary costs are deductible, but it is good to know that notary costs for the purchase deed are not deductible.
- The transfer tax to be paid is also not deductible. Here, you can find more information about the transfer tax and its regulation.
- Are you planning to renovate your house? These costs are not tax-deductible.
- Note: when you sell a house with a surplus value, you must use this amount when buying a new house (within 3 years): this is the additional credit regulation. Would you rather buy something else for this? Of course, that’s possible! But then you may only deduct the interest on the purchase price minus the equity.
We are happy to help!
Do you have questions about the deductible items regarding homeownership? Or did you buy a house, and could you use our help with the tax return? We are happy to help! Please contact us via our details mentioned below!