Tax benefits when buying your own home

The key points at a glance

Your income from work and your home is essential for calculating the mortgage interest deduction you can get on your mortgage. This income, known as box 1, consists of your salary, business profits, and income from your own home. By making use of the tax rules, you can pay less tax on your box 1 income.

1. Conditions for deduction: what can you deduct from your mortgage?

When you take out a mortgage for your own home, there are tax benefits to be had. It's important to know which costs you can deduct in order to make the most of them. For a new interest-only mortgage taken out after January 2013, it's no longer possible to claim mortgage interest deduction. You'll need to choose an annuity mortgage or a linear mortgage to qualify for these tax benefits.

2. During the term: paying less income tax

Throughout the term of your mortgage, you can benefit from paying less income tax by deducting the mortgage interest. The maximum rate at which you can deduct mortgage interest is set annually and depends on your income. Bear in mind that the phasing out of mortgage interest deduction is continuing in the coming years, so the maximum deduction rate will keep decreasing.

3. Applying for mortgage interest deduction: how does it work?

To make use of mortgage interest deduction, you need to apply for it with the Belastingdienst (Dutch Tax Authority). You do this through your income tax return or by submitting a tax refund request. Mortgage interest deduction applies for a maximum of 30 years on the interest and costs of your own home.

Frequently asked questions

How much tax benefit do I get with a mortgage?

The exact tax benefit you can get with a mortgage depends on several factors, such as your income, the interest rate you pay, and the type of mortgage you have. To calculate your tax benefit, you multiply the deductible mortgage interest by the tax rate in your income tax bracket. Want to see straight away what this benefit means for your net housing costs? Calculate your monthly costs.

How do you calculate the tax benefit of a mortgage?

Here's how to calculate the tax benefit of a mortgage:

First, determine the deductible mortgage interest (the interest you pay on your mortgage debt minus any interest received, for example from a savings or investment mortgage).
Then multiply this amount by the tax rate in your income tax bracket.
The result is the tax benefit you can achieve with your mortgage.

What are the consequences of the phasing out of mortgage interest deduction?

The phasing out of mortgage interest deduction means the maximum deduction rate decreases each year. This affects the tax benefit you can get from your mortgage. It's important to keep up to date with developments around the phase-out so you're well prepared for any changes to your tax situation.

Can I still get a tax benefit with an interest-only mortgage?

For new interest-only mortgages taken out after January 2013, it's no longer possible to claim mortgage interest deduction. To qualify for the tax benefit, you need to choose an annuity mortgage or a linear mortgage. For interest-only mortgages taken out before January 2013, mortgage interest deduction still applies.

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