renteaftrek

Renteaftrek is a Dutch tax provision that allows homeowners to deduct the mortgage interest they pay on a loan used to buy, improve, or maintain their primary residence. The deduction reduces taxable income in Box 1 of the Dutch income tax system, thereby lowering the amount of tax payable.

Eligibility and how it works

To qualify, the mortgage must be secured on a home that is owned and occupied as the taxpayer’s main residence. The deduction applies to the interest portion of the loan payments, not to the repayment of the principal. Taxpayers claim the deduction as part of their annual income tax return, using statements from their lender that show the interest paid in the year.

Interaction with eigenwoningforfait

Owning a home in the Netherlands also triggers eigenwoningforfait, an imputed rental income added to Box 1. The renteaftrek mitigates this by reducing the tax due on the combined Box 1 income, effectively lowering the net cost of owning a home.

Policy context and reforms

Renteaftrek has a long-standing role in Dutch housing and tax policy and has been the subject of reform efforts. These reforms aim to limit government spending and reduce housing-market distortions. Proposals have included gradual reductions of the deduction for new mortgages and tighter eligibility rules. Critics contend that the relief mainly benefits higher-income homeowners and can inflate house prices, while supporters argue it helps preserve affordable ownership.

Limitations and exclusions

The deduction generally applies to owner-occupied homes and certain types of mortgage loans; it is not typically available for second homes or investments unless specific conditions apply. Tax rules can change, so taxpayers should consult the Belastingdienst or a tax advisor for current rules and personal eligibility.