If you wish to apply for a mortgage loan, perhaps it would be wise not to hurry: starting next year, the Tax Authority will accept the deduction of loan rates. They are not giving anything away, but at least they are not taking anything away either, as they are looking to boost demand for this home financing method. At least, this stipulation is included in the new Fiscal Code draft, to be discussed after the Government vacation.
The mortgage market had not hoped for such a fast-paced approach, as the timeframe envisaged for this incentive was 2006-2006.
"Accepting deductibility would be great, because this is the only way to help the market grow. The deduction of this kind of expenses, which has already been granted across Europe, would boost consumption, but mainly the expansion of mortgage services," says Paul Prodan, deputy general manager at ING Bank.
Demand for mortgage loans has soared in the first half of the year, although rates are still high. Moreover, the increased number of people who can afford to pay mortgages has driven house prices up, as the offer is slower in taking off.
It is not clear yet what kind of methodology will be used for deducting this kind of expenses and whether certain constraints will be introduced. Certainly, there will be extra forms to fill in when the annual income is declared. It will still be worth it, as there are other uses you can find for the money that you will no longer have to pay to the Tax Authority.
Coincidentally or not, the list of deductions accepted by the Tax Authority has become considerably longer just before the electoral year, as compared to the original drafts.
The new draft also includes the so-called "thermopane window deductions", announced by the Finance minister, and other deductions for home improvement - modernisation of apartments and installation of individual heating units. Trade unionists also get deductions for their union contribution.
However, the incentives are accompanied by lower deductions for pensions and health insurance.
Thus, in the first Fiscal Codes, the private pension insurance was confined to 400 euros annually, twice the level stipulated in the latest draft - 200 euros.
Moreover, the contributions to private health insurance were deductible up to 2% of the annual income of natural persons. If the premiums were paid by the employers, the deductible amount accounted for 2% of the salary fund for the insured employees. However, the Tax Authority now confines the level of deductible expenses to 200 euros annually.
razvan.voican@zf.ro
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