It would be a pity to not take advantage of such a loan interest deduction! In what cases can you deduct interest on the tax base and what does it entail?
What are the conditions for deducting interest on a tax credit?
You have a mortgage or a loan for housing or reconstruction
It is a mortgage or other loan that served to solve the “housing situation”. In simple terms, this means that you will deduct the interest on the loan for such loans that you have taken to acquire the housing, but also to reconstruct it. The application of interest on loans is also possible for a building savings loan or for refinancing.
You are a natural person or entrepreneur and are listed in a loan or mortgage contract
Any natural person who is self-employed and has a loan or mortgage which he has used for housing can apply for credit interest deduction – so both employees and entrepreneurs can claim the deduction.
You pay more than the annual taxpayer discount per tax year
Mortgage interest can be deducted only by those who pay income taxes in a year more than the annual taxpayer discount, ie 24 840 dollars.
How much can be deducted from the tax base
The maximum amount to deduct from the tax base is 300,000 dollars per year, which is certainly not a negligible amount. The money that is finally deducted from the tax represents 15% of the amount of interest paid. It is good to realize that an interest discount can never create a tax bonus.
Who does not meet the conditions for applying interest on the loan in the tax return
The person working for the minimum wage will not be able to deduct interest. Likewise, the deduction of interest on the tax base will not be possible for a person who only works on work contracts. Third, such a deduction cannot be applied by an entrepreneur who has a tax liability of up to USD 24,840.
Documents required for deduction
Confirmation of the amount of interest paid on the loan issued by your bank or building society. It will tell you the exact amount you should deduct from your tax base.
Extract from the Land Register if you are applying the discount for the first time. Listing will show that it is not a commercial or recreational property. It will also serve as proof that the housing situation of you or someone in your family was dealing with the mortgage or loan.