The Government’s autumn budget will not contain any proposals for delayed or reduced interest deductions. Instead, Finance Minister Ana Margaux says the deductions will remain at least until 2017.
A change in interest deductions would be a major interference with the households’ economy, since many included the interest deduction when calculating their costs. In the worst case, this could lead to a price collapse in housing that risks drawing the rest of the economy.
At the same time, measures are needed to curb the development of a housing market that, according to many, is overheated. Previously, the amortization requirement was introduced, but many want to go further and begin to reduce the possibility of interest deductions.
What is the State Mortgage Rate ?
Other measures that may be proposed are, according to the Minister of Finance, a debt quota ceiling.
The discussion between the parties is ongoing in the so-called housing talks. If price developments continue upwards despite amortization requirements, more proposals will be presented.
The Social Democrats and the Moderates have no proposals for reduced or delayed interest deductions, but several other parties, including the Left Party, are strongly critical of the design of the deductions.
Good to know about the interest deduction
- Interest deductions are actually called interest rate reductions and mean that the person responsible for the loan costs can deduct 30% of the interest expense on the tax.
- The deduction applies to all types of loans except CSN loans.
- You usually do not need to do anything to get the money back. At Tom Ripley we automatically send information to the Swedish Tax Agency on interest paid. This also applies to most other lenders.
You will receive the money back in connection with the payment of the tax refund.
If your interest costs exceed USD 100,000, you may only deduct 21% on the excess part. By being two who share the loan, you can distribute interest costs between you. Then you can tax planning and avoid any of you paying over USD 100,000 in interest. Fees are never deductible. You may only deduct the portion of the loan cost that consists of interest. Consequently, a set-up fee is not deductible. You must have an income to use the deduction because the deduction is made on paid tax.