What is the deduction for joint loans?

What is the deduction for joint loans?

When you own an apartment, you are typically part of an owners' association, which is the collection of all apartment owners for the whole building. The owners' association handles the common decisions about the building, the yard, etc.

For large joint projects such as renovating the entire facade of the building, replacing downpipes (toilet/water pipes) or the roof of the building, it is very normal to have to take out a joint loan for the entire association to cover the costs. This means that the association goes out collectively and borrows to renovate the facade, for example. This is typically significantly cheaper than if each apartment owner had to go out and borrow money themselves.

When the association has borrowed money, it is still the owners who ultimately pay off the loan (through the owner's expenses), and therefore they can get a deduction. However, because the bank does not know who all the owners are, you have to report the deduction to SKAT yourself.

The deduction itself is the interest you have paid on the loan as the owner. You will typically receive a summary when you take out the loan, where the interest is described. Otherwise, you can contact your property manager to get this overview.

What else should you be aware of?

There are some other elements to be aware of with this deduction:

• You can only deduct the interest you pay. In other words, you should not include any installments or other fees you have paid towards the cost of ownership
• You must have proof of the loan, for example from the statement of your interest/payments at the time of taking out the loan, which can be obtained from the property manager