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Will I lose the mortgage relief for my house if I buy a second property?


If I buy a second home, will I automatically stop receiving my tax refund from the mortage interest on my first house? Or will I only just not get any interest refund from my second home?


You can get mortgage relief for your main residence, so the property in which you are living yourself. This will continue when you buy a second property. For the second property you won’t get relief (unless you bought it with the intention to live in it within 3 years, but first need to renovate it).

If you start living in the second property then it becomes your main residence. Consequence is that you lose the right to deduct the mortgage interest for the original first property, unless you put the property for sale and nobody is living in it (not even for free). You can then continue to deduct the mortgage interest for this property for another 3 years. 

Both periods start from 1 January of the following year. So if you move to another house on 1 November 2013 and your old house is for sale on that date (and nobody else is living there), the mortgage interest for the old house can still be deducted for the remaining part of 2013 plus the following 3 full calendar years, on top of the deduction of the mortgage interest for the new house. 

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Comments (2)
Comment by Sergio on Sun, Jul 5th, 2015 at 9:41 PM
Hello,I currently have a mortgage for a flat in Amsterdam but planning to repay back the amount to the bank to get full ownership of the property, and open transfer the existing mortgage for the purchase of a new flat:am I going to lose the tax relief on the mortgage!?Thank youSergio
Comment by Arjan Enneman on Wed, Sep 23rd, 2015 at 12:23 PM
It depends on how you are going to use the new and the old flat. If a flat is your principal residence then you can deduct the mortgage interest, Also if a flat is for sale and that flat was your principal residence then you can deduct the interest. But if you use a flat as investment (whether you rent it out or not), then you lose the possibility to deduct the interest for that mortgage.
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