Mortgage interest tax relief and the Dutch tax system
When you take out a mortgage for your home in the Netherlands, you may be eligible for mortgage interest tax relief. This can significantly reduce your net monthly costs.
On this page, we explain how mortgage interest tax relief works and what the current Dutch tax rules mean for your situation.
When is mortgage interest tax-deductible?
You can only deduct mortgage interest if the loan is used for specific housing-related purposes, such as:
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Purchasing your main residence
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Renovation or maintenance of your home (via a renovation loan or building deposit)
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Buying out rights such as leasehold or building rights
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One-time purchase costs related to buying your home
Interest on loans used for other purposes, such as buying furniture, is not tax-deductible. Only the part of the loan that is actually used to purchase or improve your home qualifies for tax relief.
Selling your home and buying a new one
If you sell your home and buy another property within three years, you are required to reinvest any equity from the sale into the new home.
If you do not reinvest this equity and instead take out a mortgage for the full purchase price of the new property, you will not be entitled to mortgage interest tax relief on the part of the loan equal to the equity you had. That part of the loan is then taxed in Box 3. This rule is known as the reinvestment rule (bijleenregeling).
Mortgage interest deductible for a maximum of 30 years
Mortgage interest has been tax-deductible for a maximum of 30 years since 2001.
If you increase your existing mortgage or refinance and borrow additional funds, a new 30-year deduction period starts for the extra amount you borrow. The original loan keeps its own remaining deduction period.
Special situations and additional rules
Specific rules apply in the following situations:
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You sold your home between 28 October 2012 and 1 January 2018 and were left with residual debt
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Interest on this residual debt may be deductible for up to 15 years
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You have a new-build deposit, renovation deposit or loan for maintenance or renovation
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You paid mortgage interest in advance or received a refund of paid interest
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You sell your home and buy another property
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You have equity and may be affected by the reinvestment rule
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You have a mortgage debt that already existed on 31 December 1995
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You separate or divorce and jointly owned a home
No-obligation introductory meeting
Reduction of mortgage interest tax relief
The percentage of mortgage interest you can deduct from your income has been gradually reduced over the years. The maximum tax relief rate is being lowered from 52% to 36.93%.
Originally, this reduction was planned in small steps of 0.5% per year. However, the government decided to accelerate this process.
Accelerated reduction since 2020
Under the Rutte III government agreement, mortgage interest tax relief has been reduced more quickly:
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Between 2020 and 2023, the deduction rate decreased by 3% per year
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Since 2023, the maximum deduction rate has been capped at 36.93%
This rate now applies going forward.
Who is affected?
This rule mainly affects homeowners in the highest income tax bracket. Homeowners in lower tax brackets can still deduct mortgage interest at the same rate at which their income is taxed.
For many expats, this means that the impact of the reduction may be limited, depending on their income level and tax bracket.
Reduction of mortgage interest tax relief by year
2020
As of 1 January 2020, the maximum mortgage interest tax relief was reduced to 46%.
2021
As of 1 January 2021, the maximum deduction rate was further reduced to 43%.
2022
As of 1 January 2022, the maximum deduction rate was reduced to 40%.
2023
As of 1 January 2023, the maximum mortgage interest tax relief reached 36.93%.
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