Tax

Mortgage interest deduction if you live outside the Netherlands

John Boer John Boer

Do you work in a European (EU) Member State and live in another EU Member State? Then you may be entitled to a mortgage interest deduction, according to a recent decision from the European Court of Justice.

Mortgage interest deduction in the country of income

On February 9, 2017, the European Court of Justice stated that residents of an EU Member State who receive income in another EU Member State are entitled to mortgage interest deduction in the EU country where they receive the income. This is irrespective of the country in which work is actually carried out.

Under certain conditions, this ruling even applies retroactively to income tax returns as old as 2013.

Example

Let me explain this further by an example: You live in Spain and 70 percent of your total income comes from the Netherlands, and the remaining 30 percent from France. On the basis of the above decision, the Netherlands should provide you with a mortgage interest deduction of 70 percent.

Barriers for cross-border work traffic are removed

Shirin Dilmaghani, Tax Advisor at Grant Thornton: "The decision to offset the mortgage interest rate in proportion to the share of income from each of the member states is reasonable, and it takes away a barrier from cross-border EU-workforce".

Do you have questions about mortgage interest deduction in the Netherlands while you live abroad? Please contact one of our Global Mobility Services advisors.