In October 2012, the residual debt scheme went into effect to promote the flow in the housing market. With this scheme, the interest on the financing of this residual debt could be deducted from the tax when selling a house with a residual debt, for a maximum of 15 years.
No reason to extend
The scheme would end on 31 December 2017. Despite the fact that Vereniging Eigen Huis recently argued for an extension of the scheme, State Secretary Wiebes recently indicated that he does not intend to extend the scheme. He sees no reason for this, because the flow in the housing market has now been restored. In addition, the mortgage interest rate is still historically low.
According to recent research, however, there are still 340,000 homes under water. They will have to present their moving plans or take into account higher costs and lower borrowing capacity.
Residual debt financing is therefore no longer tax deductible as of 1 January 2018. State Secretary Wiebes van Financiën does not comply with the appeal from Vereniging Eigen Huis to extend the residual debt scheme. This temporary crisis measure must keep the flow on the housing market going. Homeowners can advantageously finance a residual debt, making it easier to relocate.
If you sell your house after December 31, 2017 with a residual debt and take out a loan for this, the interest on this loan is no longer deductible. A residual debt loan will therefore have a greater impact on the remaining borrowing capacity after 31 December 2017. If there is a residual debt of which the interest is not deductible, less mortgage can be obtained when, for example, you purchase a new home or change your mortgage. If you already have a residual debt loan or close it before 1 January 2018, the interest remains deductible.
The advice for the sellers with a possible residual debt is therefore also for the transfer of the property to take place before 31 December this year.
Moving with a residual debt? Inquire about this with a mortgage advisor. This way you create a clear picture of the possibilities in your personal situation. Request an introductory mortgage interview here.