What are deductions for private loans?

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