Tax deductions from a mortgage loan

  • March 19, 2020

You have recently taken out an installment loan or a mortgage loan and are asking yourself the relevant question of tax deductions or advantages to which you can claim.

In Belgium, given the importance of the tax burden, taking an interest in taxation and tax advantages that could reduce your overall taxable income is an essential question.

Firstly, the fundamental distinction should be made between credits contracted for private purposes and those which, on the contrary, were contracted for professional purposes.


Professional credits

Professional credits

In Belgian tax law, an expenditure cannot be considered by the administration as being deductible on the sole condition that its purpose is to facilitate the collection of professional income. Thus, the car bought by the doctor to visit his patients will only be deductible because it allows him to earn income from his professional activity. On the contrary, certain mixed expenses, that is to say, which serves both professional and private life, are only partially deductible.

Thus, a loan which is intended to be essential for the collection of taxable professional income will be 100% deductible, interest included. Deductibility is generally broken down through an annual depreciation percentage. For example, a car is depreciable in five years at most. This method aims to allocate costs over different fiscal years to distribute the tax effort over several years.


The deductibility of your mortgage credit

The deductibility of your mortgage credit

In the sphere of expenses useful for your private life, the only credit that is deductible or that provides tax advantages is the credit that is used to acquire your first home: your mortgage credit therefore.

In short, the tax deduction is carried out as follows: you can deduct the principal repaid as well as the interest and insurance premiums but the total of these amounts is capped at the maximum annual of $ 2,120 per person subscribing to the mortgage loan. For the first ten years, this amount is increased by $ 710 for 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 one home.

Conditions to be able to deduct your mortgage from your taxes:

  • The loan must report to a single house and intended to be the main accommodation of the family;
  • The loan must be secured with a mortgage;
  • The duration of the loan must be at least ten 10 years;
  • The loan must be taken out with a credit company established in the EEA (European Economic Area)


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