Mortgage Interest Deduction Explained: How Homeowners Can Reduce Dutch Tax -

Buying a home in the Netherlands can create one of the largest tax deductions many households will ever claim. It is also one of the most commonly misunderstood.

Dutch mortgage interest deduction—hypotheekrenteaftrek—allows eligible homeowners to deduct qualifying mortgage interest and certain home-financing costs when calculating their taxable income in Box 1.

However, this does not mean the Dutch government refunds all your mortgage interest. You cannot deduct your entire monthly mortgage payment, and not every mortgage or home-related cost qualifies.

The benefit depends on:

whether the property is your principal residence;
what the borrowed money was used for;
when the mortgage was taken out;
how the loan is being repaid;
your income and tax position;
the home’s WOZ value;
whether you previously sold another home with equity;
whether you have a fiscal partner.

Understanding these rules before buying can help you keep the right documents, structure your financing properly and avoid claiming deductions to which you are not entitled.

This article provides general information about Dutch tax rules. It is not personalised tax, mortgage or financial advice.

Mortgage interest deduction at a glance

For most homeowners, these are the starting rules:

The property must generally be your principal residence—your main home.
The loan must be used to buy, improve or maintain that home, or to buy out qualifying land-lease rights.
Mortgages first taken out on or after 1 January 2013 must normally be repaid under an annuity or linear schedule within 30 years.
Only qualifying interest and permitted costs are deductible—not the mortgage principal.
Certain mortgage-financing costs can be deducted once in the year they are paid.
The eigenwoningforfait is added to your income and reduces the net tax benefit.
Equity from a previously sold home can limit how much of your new mortgage qualifies.

What is mortgage interest deduction?

Mortgage interest deduction reduces the amount of Box 1 income on which you may have to pay Dutch income tax.

Your home is first assigned an amount called the eigenwoningforfait. This is added to your Box 1 income. Qualifying mortgage interest and permitted home-financing costs are then deducted.

In simplified form:

Qualifying mortgage interest and costs − eigenwoningforfait = potential net own-home deduction

If the qualifying deductions are higher than the eigenwoningforfait, the resulting negative own-home balance can reduce your taxable Box 1 income.

That amount is not your refund. The eventual tax effect depends on your applicable tax rate, income, tax credits, fiscal-partner allocation and other circumstances.

When does your mortgage qualify?

Your mortgage must qualify as an eigenwoningschuld—a qualifying owner-occupied-home debt.

1. The property must normally be your principal residence

Mortgage interest deduction principally applies to the home in which you live as your main residence.

A second home, holiday home or ordinary buy-to-let property generally falls in Box 3 rather than the Box 1 owner-occupied-home rules. Interest on those properties is not normally deductible as Box 1 mortgage interest.

Special rules can apply while moving between homes, renovating a home before moving in or waiting for a new-build home to be completed.

2. The borrowed money must have a qualifying purpose

A loan may qualify when it is used to:

buy your principal residence;
improve or renovate the home;
maintain or repair the home;
buy out qualifying rights of erfpacht, opstal or beklemming.

The fact that your house is security for the loan does not automatically make all the interest deductible.

If part of the mortgage is used for furniture, a car, a holiday or other personal spending, that part is not an eigenwoningschuld. The debt and related interest must be divided between the qualifying and non-qualifying portions.

Example: A mixed-purpose mortgage

Suppose you borrow €310,000:

€300,000 is used for your qualifying home.
€10,000 is used for furniture and a family holiday.

Only the €300,000 portion can potentially qualify as an eigenwoningschuld. The interest and financing costs may need to be allocated proportionally. The €10,000 portion is generally treated as a different debt, with no Box 1 mortgage interest deduction.

Repayment rules for mortgages taken out from 2013

If you first took out the mortgage or home loan on or after 1 January 2013, you normally need to:

repay the loan within a maximum of 30 years;
use an annuity or linear repayment schedule;
agree the repayment schedule with the lender in advance;
include the repayment obligation in the mortgage or loan agreement;
make the required repayments.

An annuity mortgage generally keeps the total scheduled monthly payment relatively stable during an interest-rate period, while the interest portion gradually falls and the principal portion rises.

With a linear mortgage, you repay a fixed amount of principal, so the total scheduled payment normally becomes lower over time as the interest falls.

What if your mortgage is older than 2013?

Mortgages taken out before 1 January 2013 may fall under transitional rules.

The maximum deduction period is still generally 30 years. If the mortgage already existed before 1 January 2001, the 30-year period starts on 1 January 2001.

If an older mortgage was increased on or after 1 January 2013, the increased portion may have to satisfy the newer repayment rules and can have its own 30-year period.

Older, refinanced or partly increased mortgages can become complicated, so do not assume that refinancing automatically restarts the deduction period for the original debt.

Only the interest is deductible—not the principal

Your monthly mortgage payment can contain several elements:

mortgage interest;
repayment of the amount borrowed;
insurance premiums;
administrative or service charges.

Repaying the principal reduces your debt, but it is not a tax deduction.

Only qualifying interest and specifically permitted costs can be claimed.

Which one-time mortgage costs are deductible?

Several costs connected with obtaining a qualifying mortgage can normally be deducted once in the income-tax return for the year in which they were paid.

Cost	Normally deductible?	Important condition
Mortgage-advice fee	Yes	Must relate to arranging the qualifying mortgage
Mortgage-broker or mediation fee	Yes	Must relate to obtaining the loan
Commitment fee—bereidstellingsprovisie	Yes	Must relate to extending or securing the mortgage offer
Notary costs for the mortgage deed	Yes	Only the mortgage-deed portion
Kadaster registration for the mortgage deed	Yes	Must relate to registering the mortgage
Valuation fee	Yes	When needed to obtain the mortgage or NHG
Technical inspection	Sometimes	When required for the mortgage or NHG
NHG application fee	Yes	Must relate to the qualifying mortgage
Qualifying penalty interest—boeterente	Usually	Must relate to early repayment or alteration of qualifying home debt
Certain construction interest	Sometimes	Timing and financing arrangements matter
Costs for a qualifying renovation or new-build deposit	Usually	Only insofar as they relate to the eigenwoningschuld
Periodic erfpacht payments	Usually	Must be periodic land-lease payments

The notary-invoice distinction many buyers miss

A notary may charge you for both:

the mortgage deed—hypotheekakte; and
the property-transfer deed—leveringsakte or eigendomsakte.

The mortgage-deed costs can normally be deductible. The transfer-deed costs are not.

Ask the notary for an invoice that clearly separates the two.

When is a technical inspection deductible?

A technical or structural inspection is not automatically deductible.

It can qualify when it is required to obtain the mortgage or Nationale Hypotheek Garantie—NHG. An inspection arranged only to help you decide whether to buy the property is generally not directly deductible.

The purpose stated on the invoice and supporting documents matters.

What about penalty interest?

Penalty interest may be deductible when it is paid because you repay or change a qualifying owner-occupied-home loan early.

However, borrowing additional money to pay penalty interest or refinancing costs can produce a separate non-qualifying debt. The direct cost and the interest on money borrowed to pay that cost are not always treated in the same way.

Which home-buying costs are not directly deductible?

Cost	Directly deductible?
Purchase price of the property	No
Transfer tax—overdrachtsbelasting	No
VAT connected with the purchase	No
Purchase agent’s fee	No
Notary costs for the property-transfer deed	No
Kadaster costs for transferring ownership	No
Bank-guarantee costs for the deposit	No
Furniture and movable household items	No
Renovation work itself	No
Mortgage principal repayments	No
Ordinary home-insurance premiums	No
Interest on a non-qualifying loan portion	No

“Not directly deductible” and “cannot form part of qualifying home financing” are not always the same test.

Some acquisition costs can affect the calculation of the maximum eigenwoningschuld even though the cost itself is not a one-time deduction. Conversely, borrowing money to pay certain deductible financing charges can create a non-qualifying loan portion.

If acquisition costs, penalty interest or refinancing costs are being financed, ask your mortgage adviser or tax adviser to confirm how both the cost and the new debt will be treated.

What is the eigenwoningforfait?

The eigenwoningforfait is an amount added to your Box 1 income because you own and live in your principal residence.

It is calculated using the home’s WOZ value. WOZ stands for Waardering Onroerende Zaken: the municipality’s official assessed value of the property.

Eigenwoningforfait rates for 2026

2026 WOZ value	Eigenwoningforfait
Up to €12,500	0%
More than €12,500 up to €25,000	0.10%
More than €25,000 up to €50,000	0.20%
More than €50,000 up to €75,000	0.25%
More than €75,000 up to €1,350,000	0.35%
More than €1,350,000	€4,725 plus 2.35% of the value above €1,350,000

Most ordinary owner-occupied homes fall within the 0.35% band.

Example calculation

Assume you owned and occupied a home for the full year:

WOZ value: €400,000
Eigenwoningforfait: €400,000 × 0.35% = €1,400
Qualifying mortgage interest: €12,000
Deductible one-time mortgage costs: €3,000
Total qualifying interest and costs: €15,000

The simplified net own-home deduction is:

€15,000 − €1,400 = €13,600

The €13,600 is not the amount you automatically receive from the Belastingdienst. It is the potential reduction in taxable Box 1 income before your personal tax calculation.

If the maximum 2026 deduction rate of 37.56% applied to the full amount, the indicative gross tax effect would be approximately €5,108. Your actual result could be lower or otherwise different.

If you owned or occupied the home for only part of the year, the calculation can also be adjusted for the relevant period.

The 2026 deduction-rate limit for higher earners

If your Box 1 income exceeds €78,426 in 2026, you can be affected by the tariff adjustment for owner-occupied-home deductions.

This means that qualifying own-home deductions are not necessarily applied at the 49.50% top income-tax rate. The maximum relevant deduction rate is 37.56% in 2026.

This does not mean every homeowner receives a 37.56% benefit. Your actual tax result depends on the income bands into which the deduction falls and your wider tax position.

What if you have no mortgage or only a small mortgage?

When your eigenwoningforfait is higher than your qualifying mortgage interest and costs, you may qualify for the deduction for having no or a small owner-occupied-home debt, commonly associated with the Wet Hillen.

This relief is being phased out.

In 2026, 71.867% of the difference between the eigenwoningforfait and qualifying own-home costs is deductible.

For example:

Eigenwoningforfait: €1,200
Qualifying costs: €1,000
Difference: €200
2026 Hillen deduction: approximately €144
Remaining amount added to Box 1 income: approximately €56

This means that even mortgage-free homeowners can gradually face some taxable eigenwoningforfait as the relief is phased out.

How the bijleenregeling affects repeat buyers

If you sell a principal residence with equity and buy another home, the bijleenregeling can restrict how much of the new mortgage qualifies for interest deduction.

The relevant equity becomes an eigenwoningreserve.

In simplified terms, the equity is calculated using the sale proceeds, qualifying selling costs and the remaining eigenwoningschuld.

Example

Assume:

You sell your previous home and create an eigenwoningreserve of €50,000.
You buy another home for €400,000.
We ignore additional purchase and financing costs for this simplified example.

Your maximum potentially qualifying mortgage debt would be:

€400,000 − €50,000 = €350,000

You are not legally forced to invest the €50,000 in the new home. However, if you borrow the full €400,000, interest on the additional €50,000 may not be deductible in Box 1.

An eigenwoningreserve generally expires after three years. If it contains amounts created by different property sales, each portion can have its own three-year expiry date.

Fiscal partners buying and selling together may also need to account for each other’s eigenwoningreserve.

Renovation loans and construction deposits

The cost of a renovation is not directly deductible. Interest on a qualifying loan used to improve or maintain the principal residence may be deductible.

You must be able to demonstrate that the borrowed money was used for the property. Keep:

contractor invoices;
material receipts;
bank statements;
renovation agreements;
deposit statements;
evidence connecting each withdrawal to the work.

The two-year rule for a renovation deposit

A verbouwingsdepot is a separate account containing borrowed money reserved for renovation.

Under the Belastingdienst’s two-year arrangement:

The period begins when the renovation deposit is opened.
During the first six months, qualifying loan interest can generally be deducted without subtracting interest received on the deposit.
During the following 18 months, the interest received on the deposit is subtracted from the loan interest paid.
After two years, the unused portion no longer receives the same automatic treatment.
If money is later used for qualifying renovation work, interest relating to that used portion may become deductible.
Unused money and the corresponding debt can fall into Box 3.

The tax return can calculate the relevant amount when the loan and construction-deposit information is entered correctly.

Can a family mortgage qualify?

You do not always need to borrow from a Dutch bank.

A loan from parents, another relative, a private lender, your company or a foreign bank may qualify for mortgage interest deduction if the conditions are satisfied.

For a private loan taken out from 1 January 2013, the important conditions include:

The money is used for the qualifying principal residence.
The loan is repaid within 30 years.
Repayment follows an annuity or linear schedule.
The repayment terms are recorded in the loan agreement.
The interest rate is market-conform.
The interest is genuinely paid.
The required loan information is reported through the income-tax return.
The borrower and lender are generally not fiscal partners, subject to a limited exception.

If a family member waives the interest rather than you actually paying it, you cannot deduct the waived interest.

A proper signed agreement, repayment administration and proof of every interest payment are essential.

What happens when you temporarily own two homes?

Special rules can allow mortgage interest deduction on two homes during a move.

Your previous home is empty and for sale

If you move out and the previous home remains empty and genuinely available for sale, interest may remain deductible for:

the calendar year in which the home becomes empty; and
the following three calendar years.

If the old home becomes empty in 2026, the permitted period can therefore run until 31 December 2029, provided the conditions continue to be satisfied.

You temporarily rent out the old home

You cannot claim Box 1 mortgage interest deduction for the rental period.

The home and related debt generally move to Box 3 while it is rented. If the tenancy ends and the property becomes empty and available for sale again, the deduction may resume for the remainder of the original permitted period.

Renting the property does not pause or extend that original deadline.

Your new home is empty or under construction

Interest may qualify when you genuinely intend to move into the new home within three years after the tax year concerned and the property remains available for your future occupation.

Can fiscal partners divide the deduction?

Fiscal partners can normally allocate their joint own-home income and deductions between them, provided the complete allocation totals 100%.

It may appear logical to allocate the full deduction to the higher earner, but that is not automatically the best result. The 37.56% rate limitation, tax brackets, credits and each partner’s income can affect the calculation.

The online income-tax return allows fiscal partners to test different allocations before submitting.

If you jointly own a home but are not fiscal partners, different rules apply. You may generally deduct only the interest and costs corresponding to your ownership and debt position and what you actually paid.

How to claim mortgage interest deduction

You have two main options.

Option 1: Claim it in your annual income-tax return

When completing your Dutch income-tax return:

Confirm the home and ownership period.
Check the WOZ value.
Enter or verify the qualifying mortgage debt.
Check the amount of interest actually paid.
Add qualifying one-time financing costs.
Separate non-qualifying loan portions.
Account for any eigenwoningreserve.
Report qualifying family or private loans.
Test the allocation between fiscal partners.
Review all pre-filled information before submitting.

Do not assume every deductible purchase cost has been automatically included simply because your bank supplied mortgage information to the Belastingdienst.

Option 2: Receive the expected benefit during the year

You can request a voorlopige aanslag—a provisional tax assessment—to receive the estimated tax benefit in monthly instalments.

This does not increase the total deduction. It gives you the expected benefit earlier.

A provisional assessment is based on estimates and can be corrected later. A 2026 provisional assessment issued using older information may, for example, be based on 2024 data.

Update it if:

you buy or sell a home;
your mortgage interest changes;
you refinance;
your income changes;
you separate from or start living with a partner;
the ownership arrangement changes;
the home is rented out;
a family loan changes;
your expected deductions are materially different.

If the monthly amount was too high, you may have to repay the difference after the annual tax return.

Documents to keep

Create a permanent digital folder for the property and retain:

annual mortgage statements;
mortgage and loan agreements;
repayment schedules;
mortgage-adviser invoices;
mortgage-broker invoices;
the notary’s settlement statement;
a notary invoice separating mortgage-deed and transfer-deed costs;
Kadaster invoices;
valuation invoices showing their purpose;
NHG documentation;
penalty-interest statements;
family-loan agreements;
proof of family-loan repayments and interest payments;
renovation invoices and receipts;
construction or renovation-deposit statements;
bank statements showing how borrowed funds were spent;
WOZ decisions;
documents from the sale of a previous home;
calculations of any eigenwoningreserve.

Common mortgage interest deduction mistakes

Avoid these expensive errors:

Claiming the complete monthly mortgage payment.
Treating principal repayments as interest.
Assuming all debt secured against the home qualifies.
Claiming furniture or private spending as home debt.
Deducting the complete notary invoice.
Claiming transfer tax or a purchase agent’s fee.
Claiming ordinary renovation costs directly.
Ignoring the eigenwoningforfait.
Forgetting equity from a previously sold home.
Using an undocumented family-loan arrangement.
Deducting family-loan interest that was never actually paid.
Continuing to claim interest while an old home is rented out.
Treating a provisional assessment as the final calculation.
Assuming all pre-filled information is complete.
Keeping unnecessary debt purely because the interest is tax-deductible.

A tax deduction makes qualifying interest less expensive. It does not make borrowing free.

What should you do next?

If you are preparing to buy:

Ask the mortgage adviser which parts of your expected purchase costs are directly deductible.
Request a written breakdown of the mortgage-deed and transfer-deed costs.
Check whether the loan will satisfy the post-2013 repayment requirements.
Tell the adviser about any previous home sold in the last three years.
Disclose any part of the financing coming from family or another private lender.
Keep every invoice and payment record from the beginning.

If you already own the home:

Find your annual mortgage statement and WOZ decision.
Check what every loan portion was used for.
Review any one-time costs paid during the year.
Check whether a previous-home equity reserve applies.
Test fiscal-partner allocations where relevant.
Review your provisional assessment and update outdated estimates.
Get professional advice if the home is partly rented, the loan has mixed purposes, you are separating, you have emigrated or your financing involves a family member or company.

Do not choose or retain a mortgage based solely on the expected tax benefit. Consider the total interest cost, repayment risk, emergency savings and long-term financial plan.

Frequently Asked Questions

Is all mortgage interest tax-deductible in the Netherlands?

No. It generally needs to relate to a qualifying eigenwoningschuld for your principal residence. The loan’s purpose, date and repayment structure matter.

Can I deduct my entire mortgage payment?

No. Mortgage principal repayments are not deductible. Only qualifying interest and permitted costs can be claimed.

How long can I deduct mortgage interest?

The maximum period is generally 30 years. Different portions of a mortgage can have different starting dates.

What if my mortgage was taken out before 2013?

Transitional rules may apply. The post-2013 annuity or linear repayment requirement may not apply to the original older portion, but increases made after 2013 can be subject to the newer rules.

Are mortgage-adviser fees deductible?

Yes, when the advice and mediation costs relate to obtaining a qualifying mortgage. Advice relating only to purchasing the property is not automatically deductible.

Which notary costs can I deduct?

Notary and Kadaster costs relating to the mortgage deed are normally deductible. Costs relating to the property-transfer deed are not.

Is Dutch transfer tax deductible?

No. Overdrachtsbelasting is not a direct income-tax deduction.

Are renovation costs deductible?

The renovation work itself is not directly deductible. Interest on a qualifying loan used for improvement or maintenance may be deductible.

Can I deduct interest on a loan from my parents?

Possibly. The loan must satisfy the qualifying-use, repayment, interest-payment and reporting conditions. For post-2013 loans, an annuity or linear schedule and 30-year repayment period normally apply.

Can I deduct mortgage interest on a second home?

Generally not in Box 1. Second homes, holiday homes and investment properties are normally treated under Box 3.

Can I receive mortgage interest deduction monthly?

Yes. You can request a provisional assessment. The monthly amount is an advance estimate and can be corrected later.

What happens if I rent out my old home?

Mortgage interest deduction is normally suspended during the rental period, and the home and debt generally move to Box 3.

Is keeping a mortgage for the tax deduction a good idea?

Not automatically. You still pay more in interest than you save in tax. The decision should be based on your complete financial position.

Official Sources Used

Last checked: 2 September 2026.

This information is general and does not replace personalised advice from a qualified Dutch tax adviser, mortgage adviser or financial planner.