Your mortgage and debt balance insurance

Tax return: It’s the time of year again. The tax authorities expect you to have a correctly completed tax letter. Not the nicest work of course, but filling it in correctly is also in your interest: it can yield you a nice saving.

For example, do you have to state the premium of your debt balance insurance on your tax return? Or better not? Certainly so read this article because who likes to pay too much to the tax authorities?

The loan and debt balance insurance for your home: what is deductible?

The loan and debt balance insurance for your home: what is deductible?

The government encourages it to have its own home. Your loan for your property and your debt balance insurance entitle you to a tax reduction under certain conditions. One of those conditions is that there is always a maximum tax deduction. Even if you have had more costs for the capital repayment of your loan, interest or insurance.

The debt balance insurance must be taken out on a person younger than 65, such as the Hypo Protect Classic formula. (For this formula, by the way, you are free to enter the premium for tax purposes. We explain this below in scenario 2.) That person must also be the owner or usufructuary. So if you have a formula where you have one and the same debt balance insurance, the tax authorities will unfortunately not allow a tax deduction.

You immediately want a tax benefit for yourself

You immediately want a tax benefit for yourself

Then you can tax the premium for your debt balance insurance. But beware: first calculate if you are not already at the maximum with the deductible amounts of your loan. Here you will find an overview of the current ceilings for the Flemish Region. This overview also shows that it makes a difference in which year you took out your mortgage.

If you are over the maximum amount, it makes no sense to put the premium on your tax return. On the contrary: if you die, your surviving relatives will be taxed while you have not received a tax benefit for life! Are you not yet at the maximum? Then it is smart of course. If you pay the debt balance premium insurance in one go, you will reach that maximum faster.

You want to leave more for your next of kin

You want to leave more for your next of kin

If you do not now contribute the premium of your outstanding balance insurance, your next of kin will not have to pay tax on the paid capital out. If you want to give them that benefit, it is better not to state your premium on your tax return.

Do you have any questions about debt balance insurance? We are happy to help you.

The rules for tax deductibility differ by region and depend on the year in which you took out your mortgage.

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