Loan and tax return

Yes he has. For example, did you know that you can reduce your personal income tax base by paying interest on your loan? You have thousands of crowns can be saved.


Which type of loan does it cover?


Reducing the tax base by the amount of interest paid on the loan is one of the ways in which the state helps its citizens to solve their housing situation. This clearly implies that the loans covered by this option must be drawn for housing or, as the law says: to finance housing needs. In principle, the following loans are involved:

  • Mortgage loan
  • Building savings loan
  • Loan granted on the basis of any of the aforementioned loans, ie pre-mortgage loan, bridging loan and other similar credit products

The discount can be applied once a year when drawing up the tax return for the previous year. One household can deduct a maximum of $ 300,000. With a 15% income tax rate, you can save up to $ 45,000.

You can only deduct interest paid, not loan repayments. Your bank or building society will confirm how much you have paid in the interest for the previous year.


What belongs to housing needs?

home loan

All possible options are listed in the Income Tax Act, in particular:

  • Construction, purchase or alteration of an apartment, family house or apartment building
  • Purchase of land on which you intend to build a house (construction must start within four years of the conclusion of the contract)


Conditions for deduction of interest on the tax base

tax loan

However, to finance a housing loan is not the only condition for claiming a tax base reduction. To do this, it is essential:

  • To participate in a credit agreement
  • To own the property and at the same time
  • To use it for permanent living (if it is already habitable)

In the case of a permanent residence condition, it can be not only your own person but also your spouse, your descendants, parents or grandparents. It is also important that you actually use the property for housing, simply registering for permanent residence may not be enough. If you have to prove this, if necessary, it may result in electricity bills, neighbor testimonies, etc.


Employees can apply a discount through an employer

apply loan

If you have signed a tax declaration with your employer, it will also deduct interest paid from your income tax base. However, the payroll office will ask you to confirm the interest paid by the bank / building society.

If you go to the payroll office for the first time, you will need to bring with you the extract from the Land Register, proof of permanent residence in the place and usually also a copy of the credit agreement.

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