What are deductions for private loans?

Aske Buemann

CEO & Co-founder

Deductions for private loans

The deduction for private loans is a rather unknown deduction. It applies, for example, if you have borrowed money from family, friends or other private individuals. If you pay interest on these loans, you can claim a deduction.

Because these loans are not intermediated by a bank or similar, no one automatically reports the interest. Therefore, you have to report them to SKAT yourself. We will guide you through this in this article.

In this article we will go through:

  • What deductions for private loans are
  • Other conditions to be aware of
  • Whether you can get deductions yourself

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What are deductions for private loans?

When you make a loan between private individuals, for example a loan from your parents, you pay back the loan over a number of years and typically with interest on top. You can get a deduction for that interest. Since none of the parties, i.e. you and, for example, your parents are a company, no one reports the deductions to SKAT. Therefore, you must make sure to report them yourself.

There are two types of interest you can deduct. The first is interest on loans from family or friends, as mentioned above. The second is interest paid on a reimbursement statement when buying/selling a house or apartment. When you take over a house or apartment, a statement is made of the expenses incurred by the seller but related to the buyer and vice versa. In some cases, the buyer can take over the seller's loan and must therefore enter the interest paid by the seller on the reimbursement statement. The interest is actually related to the buyer, who also pays it in the end, so therefore the buyer can deduct it.

The deduction itself is the actual interest paid either on the loan or the refund statement. But there are a few key elements to be aware of.

What else should you be aware of?

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

  • The loan must be personal to you. For example, you cannot claim a deduction for paying interest on loans your children have with other people
  • You will need information on the person you are paying interest to, such as civil registration number or name and address
  • You must have proof of the loan, such as a loan document

See if you can get a tax refund in just 15 minutes.

In TaxHelper, we help you find the deductions you're entitled to. You answer a few simple questions that take just 15 minutes to complete.

Then we report the deductions, and you get an extra DKK 2,704 back in tax. At the same time, you only pay if you get a tax saving.

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