Couples who jointly take out a loan for the purchase of a house, or the renovation of an existing home, can end up with a profit on balance. The low interest rates on housing loans at the time means that the total costs for a loan can be lower than the housing bonus granted by the government.
Tax benefit from the housing bonus
The reformed housing bonus, which took effect on 1 January 2015, makes it possible for taxpayers to deduct 2,280 dollars from the net income each year for costs on a housing loan. The tax benefit on this amount is 40 percent, which means that an amount of 912 dollars less per year has to be paid to the tax authorities. If you borrow two people, both people enjoy the benefits of the housing bonus, and you pay 1,824 dollars less in taxes per year. If Mario and Julia Martins take out a home loan for a period of 10 years, they save a total of 18,240 dollars in this way.
Costs versus bonus
The interest on home loans is currently historically low in Belgium at an average of 2.6 percent (the average of the 10 lowest providers on 1 February 2016). At this interest rate, for a home loan of 100,000 dollars with a term of 10 years, the total credit costs for Mario and Julia will come to an amount of 14,300 dollars (interest is only calculated on the balance of the debt by all banks) . If this amount is set off against the housing bonus that is indirectly received from the state, the Martins family makes a net profit of 3,940 dollars (18,240 – 14,300) on the home loan. Note that it is not a profit that can be received as an amount. It only means that the government helps to pay for the purchase or renovation of a home.
Profit only under certain conditions
The tax benefits of the housing bonus have been created by the government to encourage the conclusion of housing loans. But to book a profit on balance with this is only possible under certain conditions. For Belgians who only take out a loan, the tax deduction only applies once, even if the partner works and pays the tax authorities every year.
The maximum deductible amount on the housing bonus of 2,280 also applies only for the first 10 years of a home loan. From the eleventh year, only up to 1,520 dollars can be raised for credit costs. And finally, the housing bonus is only intended for the purchase or renovation of your own and only home. Couples cannot benefit from a tax advantage through a loan for the purchase of a holiday home.