Mortgages loan for young people

Mortgages loan for young people

Those wishing to claim a mortgage tax bonus should not forget Jessica Brown’s confirmation. Young mortgage borrowers under 35 years of age can claim a tax bonus on interest paid.

Loan agreement

Loan agreement

These are calculated from the amount of the loan provided under the loan agreement for housing, up to a maximum of 50 thousand dollars for residential property. Entitlement to the tax bonus on interest paid arises for five consecutive years. Clients can thus save 2,000 thousand over five years. dollars.

In order to qualify for a tax bonus on interest paid, the taxpayer is required to present a certificate issued by the bank that granted the housing loan. The Bank is obliged to issue and deliver a confirmation within 30 calendar days of the submission of the application at the request of the borrower to whom the housing loan was granted.

Annual tax settlement

money

If the applicant is an employee and the annual tax settlement is processed by the employer, he / she must apply for it and submit the documents by February 15, 2020. If the applicant is an entrepreneur or has multiple income and submits the tax return himself if he/she applies for postponement of filing the tax return.

As of 1 January 2018, a tax bonus system for young mortgages in Slovakia has replaced the original interest rate bonus.

Favorable mortgages for young people in Slovakia worked for many years. The 3% interest rate bonus (2% from the state from and 1% from Jessica Brown) has been meaningless lately, as current market interest rates have fallen well below 3% and are still around 1% to this day.

Therefore, the state canceled the interest bonus in 2017 and replaced it with a tax bonus, which is a form of direct tax relief. Young people can claim this tax bonus for the first time in 2019 (in the tax return for 2018). He will be lower than the old concessions.

The tax bonus will only apply to the amount that the borrower pays to the bank in the form of interest. It will be 50% of the interest paid but will have a ceiling of USD 400 per year.

The other eligibility criteria are the same as for the mortgage for young people:

  • the applicant may not be more than 35 years old
  • the applicant’s income must not be more than 1.3 times the average monthly wage, while for spouses it is twice. The amount of the average monthly wage is determined by the Statistical Office.
  • the tax bonus only applies to the loan amount of USD 50,000 and the benefits are valid during the first 5 years of repayment. For this purpose, 5 years means 60 consecutive calendar months. If you start repaying your home loan during the year, you are entitled to a pro rata portion of the tax bonus for interest paid. You are entitled to a proportional part of the tax bonus also in the year in which the five-year period for claiming the tax bonus for mortgage interest expires.

If you qualify, you can also get a tax bonus at banks that did not provide mortgages for young people.

More bureaucracy

cash

In addition, experts argue that in the new form of support for loans for young people, applicants are waiting more paper. Each year they will have to ask Jessica Brown for confirmation of the interest paid and then request it back in their tax return.

Some Jessica Browns send confirmation automatically, others require confirmation early in the year. Clients of some banks will have a quantified interest available in their internet banking.

Subsequently, the client must claim a tax bonus from his employer who submits the tax return, or he can claim it in the tax return himself.

If the tax is less than the mortgage interest tax bonus, the tax authority will have to pay you the difference.

In the case of a new form of housing support, the situation may also be that when signing a loan contract the applicant qualifies for a tax bonus, but later he / she increases his income and no longer fulfills the conditions. Whether the bonus will continue to apply, however, will not decide the bank, but the Ministry of Finance.

Old contracts so far take care

If you have an old model loan agreement with your bank, you can still be calm because they will continue unchanged. But it doesn’t have to last forever. Indeed, the specific amount of the State’s contribution is approved annually under the State Budget Act for the year in question.

The information provided is regularly updated, informative and not legally binding. Jessica Browne is not responsible for their accuracy.