Mortgage interest deduction after the divorce

What about the mortgage interest deduction after divorce.

The Tax Authorities regard existing mortgages of married couples as 50% debt for one and 50% debt for the other, unless something different is stipulated in the prenuptial agreement. If you take out a new debt to buy out your ex-partner, this is seen as a new mortgage debt. To be eligible for the full mortgage interest deduction, including your new loan, you are required to repay the new loan annuously or linearly in 30 years. If you continue to live in the old house, you have 2 options: your ex pays all interest or you both pay half.

 

Scenario 1: your ex pays all interest

First 24 months. Half of the interest is deductible for your ex up to 24 month after departuer. The other half of the interest is deductible for your ex as maintenance. You must declare that part of the interest as maintenance received (you pay tax on this). You may deduct the same amount as interest for the owner-occupied home. On balance, you therefore do not benefit from the interest deduction. You both state half of the notional rental value. If you pay rent to your ex, then you do not have to report that rent to the Tax Authorities.

 

Scenario 2: Your ex still pays the half of the interest

First 24 months. During the first 24 months after your ex has left, the interest is deductible for him. He must state half of the notional rental value, but he can deduct the same amount as maintenance. You state half of the notional rental value as maintenance received. In addition, your ex also states half of the notional rental value and he may deduct half of the notional rental value as paid partner maintenance.

More information about divorce and your mortgage can be found on the website of the Tax Authorities.

 

After 24 months, the interest has expired

After 24 months the interest is no longer deductible. From then on, the departed partner must take half of the WOZ value of the house in box 3. He may deduct the loan that he still has for that house from his assets in box 3. Note the debt threshold.

This information comes from the Consumer Association. For the full article, see: https://www.consumentenbond.nl/hypotheek-aanpassen-besparen/scheiden-en-je-hypotheek

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