Mortgage types and tax
Mortgage and tax is a difficult matter for many individuals, while there are so many opportunities. It goes without saying that you do not file an incorrect tax return, apply prohibited tax constructions or keep a sloppy administration. When you delve into tax matters, or receive expert tax advice on tax regulations and laws, there are important benefits to be gained and you are protected against sanctions, fines, legal proceedings and the like.
Private individuals sometimes need specialist knowledge, for example for calculating taxes, clarity in the tax consequences of pension, inheritance or divorce, making real estate financially transparent, and the like. AGA Fiscalisten has the expertise and experience to fully clarify complex financial issues. Our reliable expert tax specialists, who all have years of experience, see every opportunity. All our tax specialists have years of experience and the mr. title.
Mortgages types
If you wish to make use of the mortgage interest deduction, then from 2013 only the mortgage interest deduction can be used, with an annuity mortgage or the linear mortgage. Only under certain conditions are you still entitled to mortgage interest deduction for other types of mortgage such as the two mentioned above. Namely, if there was a home equity debt on 31 December 2012.
Annuity mortgage
An annuity mortgage is a form of mortgage in which the monthly sum of interest plus repayment remains the same, during the entire fixed-rate period. At the maturity date, the entire debt is repaid. With an annuity mortgage, you pay the same amount of monthly costs every month. In the beginning, more mortgage interest is paid and less mortgage is paid off. The mortgage interest that is paid is deductible on the tax return. Every year you pay more and less mortgage interest is paid. Every year there is therefore a smaller deduction for mortgage interest deduction.
The advantage of this type of mortgage is that an annuity mortgage gives you certainty about your monthly expenses, since you pay exactly the same gross amount every month. In addition, you can be sure that your mortgage has been paid off in full after a fixed period of time and the debt you have becomes less every month (although less quickly than with a linear mortgage).
With an annuity mortgage you can make extra repayments. This will lower your monthly costs or shorten the term of the mortgage. In the event of interim repayment, pay attention to a possible penalty interest. This depends on the conditions of the lender whether it must be paid and what the amount of the fine is.
Linear mortgage
Every year with a linear mortgage you pay exactly the same amount of repayment. Because you pay off the mortgage faster with a linear mortgage than with an annuity mortgage, the tax benefit drops faster. In fact, you pay a lot more in the beginning with a linear mortgage, but you will pay less every year. A linear mortgage is a mortgage in which you pay off the same amount every month during the time it runs. This means that you can pay off your linear mortgage evenly. The amount you pay off depends on the amount of the principal and the term of the mortgage. Every year the tax benefit you have in the Netherlands decreases, because the amount you pay in interest (and can therefore deduct from the tax authorities) becomes lower.
In the long term, the linear mortgage form offers financial benefits. Over the entire term, it is the cheapest form of mortgage and you also pay off relatively quickly. As a result, you have less chance of residual debt if you are ever forced to sell the property on negative terms. However, this type of mortgage has the disadvantage that you have relatively high costs in the beginning compared to other mortgage types.
The linear mortgage is cheaper if you look at the entire term of the mortgage. Because you pay off the debt faster, you pay less interest over the total term. Still, the annuity mortgage is the most popular. About 60% of newly closed mortgages are annuity mortgages. This is due to the lower monthly costs at the beginning of the term. For many people, higher burdens are also better borne at an older age.
Questions from private individuals about mortgage
The following questions that we regularly receive from private individuals:
- What about the homeownership flat rate?
- Where can I mention mortgage costs and notary fees in the tax return?
- The amount of mortgage interest to be paid falls below the homeownership flat rate; Can I deduct the remaining mortgage debt from assets in box 3?
- What about the repayment requirement for a mortgage loan?
- Where should I mention penalty interest in the tax return?
- Can I apply a mortgage repayment for the consumer part?
Our tax specialists are asked many other financial questions and issues than the above. You can also submit all these questions to us. We provide clarity and solve your tax issue or question.
Why advice on mortgage from AGA Fiscalisten?
AGA Fiscalisten stands for high-quality expert tax advice. All our tax specialists are senior tax specialists, have years of tax experience, and have graduated from the university in tax law and hold the title "mr.".
A (senior) tax specialist specializes in tax law while a tax advisor has only completed tax courses. A tax advisor has much less knowledge than a tax specialist and often makes mistakes with potentially significant financial consequences. It is wise not to settle for a non-qualified tax advisor, but to engage an expert senior tax specialist. This way you avoid problems, fines or procedures and you do not miss out on tax benefits due to advice that is not sufficiently expert.
High quality tax specialist; Master title mr. and years of experience
All our tax specialists have years of tax experience and the "mr." title. The most recent developments and changes concern taxation and all relevant legislation is studied and discussed by our tax specialists. This gives us the opportunity to clarify all the problems and issues about taxation. We achieve the best possible result for our customers. Tax advice, tax returns, financial advice, legal advice or discussion partner, AGA Fiscalisten will arrange it for you!
Contact AGA Fiscalisten
The tax specialists of AGA Fiscalisten can do a lot for you, from an answer or advice to your tax questions to guidance throughout the entire process. If you have any questions or issues and would like high-quality tax advice, please contact one of our expert experienced tax specialists for an intake interview free of charge and without obligation.
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