Optimize your deductions when buying a house

Aske Buemann

CEO & Co-founder

Tax deductions when buying a house

Tax deductions when buying a house

One important factor to keep in mind when you are about to become a homeowner is the potential tax deductions.
It is important that you report it correctly, as mistakes can result in you either paying too much or too little tax.

As a homeowner, you are entitled to a tax deduction for the interest costs associated with financing your property. This applies regardless of whether it's a bank loan or a mortgage.

The purpose of an interest deduction is to ease financial burdens for people who finance their home through loans.

The interest deduction works as a tax benefit whereby a certain portion of the interest expenses associated with a loan are deducted from taxable income. This results in a reduced tax burden for the individual, as the total amount of income that is taxed is reduced as a result of the deducted interest expenses.

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What is interest deduction?

The interest deduction is a tax deduction that comes into play when you pay interest on a loan.

This deduction helps to reduce your tax burden. However, it's worth noting that the interest deduction only applies to mortgages, home loans and bank loans.

Loans such as payday loans and other consumer loans that are not directly related to home purchases do not qualify for this deduction.

The size of your interest deduction depends on your loan repayments

In the year 2023, the interest deduction still plays a crucial role in Danes' personal finances. This deduction follows a progressive scale, which means that the higher your income is, the lower your percentage entitlement will be.

The interest deduction is automatically calculated through your tax return when you enter your expected interest costs for the coming year. Therefore, it is important to be aware of your expected interest payments so that you get the accurate and appropriate deduction.

The more you pay off each month, the greater your tax savings can be. When taking out a loan, it is therefore important to consider how much you can afford to pay off.

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.

Start here

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