There are many tax benefits if you own a house if you take a mortgage loan for at least 10 years. Of course the tax benefits are different from the country where you live and probably also the term of the loan which is necessary for these benefits different.
The tax benefits depend of many factors and there are different systems of deductions of your income taxes.
We need to make a difference between:
– The debt remainder assurance: this is the amount that you pay for the case that your partner should die during the term of the mortgage loan. In this case you don’t need to pay the part of your partner anymore. By example there is a mortgage loan between a man and his wife for each 50 % and by example the man should die two years before the end of the loan the woman needs only to pay 50% of the amount which needed to be paid off.
– The monthly pay off
– The interest
The amount paid for the debt remainder assurance is in most cases paid the first year because the tax benefits are often better in this case. Many people start with the pay off the year after they signed the contract of their mortgage loan; of course also for the best tax benefit.
Till 2005 the tax benefits were higher for higher earnings than lower but for new mortgage loans after 2005 the tax benefits are the same for every one but of course only for the new mortgage loans. The tax benefit for these new mortgage loans is a fixed amount but can change every year. The government decide every year about this matter.
What concerns the interest people who have a new mortgage loan since 2005 don’t get any tax benefit anymore because the fixed amount for the tax benefit includes everything. Mortgage loans before 2005 have a tax benefit of 12,5% of the cadastral income of the house for the interest they paid every year.
Of course the laws are different in every country and also the calculation of the tax benefits is different.
In my opinion are the tax benefits for people with a higher income better than these with a lower income.
Even if you can buy a house without a loan you can best take one for the benefit of the taxes and you save a lot of money on the long term. During this period you can invest this money on a safe way without risk and you have on this way also the benefit of the return of your investments.