The new tax return form for personal income for tax assessment year 2018 has recently been published, so it is high time to examine how you can correctly fill in your mortgage in your personal income tax return. The biggest change in 2017 occurred in the housing taxation system of the Brussels-Capital Region. The other regions have all maintained a status quo compared to last year. A full overview is given below.
Mortgage for your "own home" – a regional matter in a regional tax return
The reference date for the fiscal residence of a region for the assessment year 2018 is the taxpayer's fiscal residence on 1 January 2018. From this year onwards, this will also determine the form of the return, as there are now three regionalised returns. Consequently, if the taxpayer lives in the Flemish Region, it is no longer possible to see codes that can only be filled in by inhabitants of the Walloon and Brussels-Capital Regions.
For older mortgages, taken out before 2005 or homes re-mortgaged between 2005 and 2015, there are two options. Construction saving and the additional interest deduction, or long-term saving and the ordinary interest deduction.
Click here for an overview of these 'old' tax benefits at the Flemish level.
Like last year, there are three 'types' of Flemish home deductions.
For the first two categories of the home deduction, the taxpayer can only take advantage of it if the dwelling qualifies as their "sole, own home" on 31 December of the mortgage year.
- Mortgages taken out between 1/1/2005 and 31/12/2014 (the old Flemish home deduction)
- Mortgages taken out in 2015 (new Flemish home deduction of the first generation) this is a 'light version'.
For the third category, the home deduction for mortgages taken out from 2016 onwards, the only requirement is that it is the own home, and no longer the sole own home. The amounts of the tax basket and the tax benefit are the same as for mortgages taken out in 2015.
Click here for an overview of the various home deductions.
The status quo as regards home deductions has also been maintained here. For mortgages taken out from 2016, the new 'Chèque Habitat' applies in principle, instead of the 'Walloon home deduction'.
Click here for an overview of the Walloon tax benefits for mortgages.
For an extensive examination of the conditions, we refer you to our article on housing taxation from last year.
As announced last year, there has been a major U-turn in Brussels, as the Brussels-Capital Region no longer provides any tax benefits for mortgages taken out from 2017 onwards. From 2017 onwards, an increased abatement will be granted on the registration fees payable at the time of purchase.
For mortgages taken out before 2017, the existing tax benefit will be retained, and the amounts of which (e.g. housing deduction) will be further indexed. The date of the mortgage is the date on which the authenticated deed of the mortgage was drawn up by the notary. Re-mortgages concluded from 2017 onwards, which (and to the extent that they) replace a mortgage taken out before 2017, are still considered, taxation-wise, as mortgages taken out before 2017, and benefit from the current tax benefits. In the case of life insurance premiums, the date of the mortgage guaranteed by this individual life insurance policy is taken into account, and not the date on which the insurance policy is taken out, to determine whether a tax benefit may still be enjoyed. Mortgages taken out before 2017 no longer entitle the taxpayer to tax reductions for mortgages in Brussels in one specific case. Namely, when the taxpayer who still borrowed in 2016 to purchase their own home, took advantage of the increased abatement of €175,000 on the registration duties when the deed of purchase was executed in 2017.
Click here for an overview of the tax benefits for mortgages taken out up to 2016.
Mortgages for your "not own-home" – federal reductions
Finally, there are federal tax benefits for mortgages taken out for the taxpayer's 'not own-home'. The abolition of the federal indexation means that the same limit amounts apply as last year.
Click here for an overview of the tax benefits at the Federal level.