![]() ![]() If you borrow money to finance some annual repairs in your home, you cannot get deductions. If you borrow money from the bank as a private loan client to pay off your personal share of the housing company’s repair cost or your share of a loan that the housing company has taken, you can deduct the interest expenses. However, if you borrow money as a private debtor to pay off your personal share of the housing company’s repair cost, or to pay off your share of a loan that the housing company has taken, you can deduct the interest expenses. If you live in a housing company and the loan for financing the repairs was taken by the housing company and not by you, the interest expense is included in the monthly maintenance charge you pay to the housing company, and you cannot deduct it. Starting 2023, tax rules no longer allow deductions for paid interest expenses of home loans. In 2022, you can deduct 5% of the interest. This deduction is similar to deductions on usual home-loan interest expenses. You are entitled to deductions for the interest on a loan taken for major repairs. Expenses for major repairs in your permanent home If you have borrowed money for paying the initial payment for a right-of-occupancy contract, you can deduct your interest expenses. The form of residence known as right-of-occupancy involves an initial payment to receive the right to live in the apartment, and further regular maintenance charges payable to the association. However, you cannot deduct interest expenses that are included in your rent. If you have borrowed money in order to finance your part of the shared ownership, you can deduct your interest expenses. This is an arrangement involving the purchase of a fraction of the shares. In other words, you cannot get deductions for the monthly payments to the housing company that are partly intended to cover the interest payments on a loan taken by the housing company. You can only deduct the interest expenses that relate to your personal loan. You may have signed a contract that enables you to pay for a part of the price of the home yourself while the remainder is financed by a loan taken by the housing company or by other means. You may also purchase only a part of a residential property (a fraction). Interest deduction for other types of home loans In addition to the interest expenses, you get deductions for any bank charges. In this case, you are considered to have a deficit in capital income, and 30% of this deficit is credited from your tax on earned income. However, if there is not enough capital income and you pay high interest, the result of your operation is negative. The interest expenses for loans relating to residential-property investment are first deducted from your capital income. For example, if you rent out an apartment you own and receive rental income for it, that is considered production of income. you receive taxable income from the investment you made with the borrowed funds. This is considered a loan for the production of income, i.e. If you have borrowed money to buy residential property in order to rent it out, you can deduct all the related interest expenses. See example calculations for deficit in the capital-income category Deductions for loans taken for investing in residential property ![]() 30% of this deficit is deducted from your income taxes on wage income and other earned income. However, if you have no such income or if your interest expense is higher than the capital income you receive, you will be treated as having a deficit of capital income. The deductible part of the interest expenses is primarily subtracted from your capital income. Deduction for home loan interest Deduction for home loan interest Interest expenses paid during: However, since 2012, the size of this deduction has diminished step by step, and for the tax assessment of 2022, only 5% of home-loan interest is deductible. It does not matter whether the home is a single-family house or an apartment in a housing company. You can claim a part of interest expenses for a home loan if you have taken the loan in order to buy a permanent home for you or your family or to pay for a major repair in your home. Residential property or expenses for a major repair in the property ![]() If you have taken a loan in order to buy your home as a first-time homebuyer, read the instructions for deductions. The way the deduction is determined is affected by the way you use your residential property. If you have a home loan and you pay interest on it, you can usually deduct either all or at least part of the interest. ![]()
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