If you want to make use of mortgage interest deduction, this means that the mortgage debt must fall in Box 1: taxable income from work and home. That gives you a tax advantage, we calculate with 40%, on the interest of the mortgage. That is well worth it, especially if the debt is high and the interest rate high. But it also creates obligations; to qualify as a mortgage debt, there is a maximum amount of money to be provided, a mandatory repayment, an old regime regulation (repayment-free) and so on.
However, with the current very low interest rate, there is an important reason to reconsider that qualification in box 1. The advantage has in fact become very limited and the question is whether the mandatory rules (including the owner-occupied home surcharge) still outweigh that advantage. By transferring the property to Box 3, the interest deduction ceases, but the tax rules relating to the owner-occupied home loan also cease to apply. This means that special solutions are possible, such as saving instead of repaying the loan or keeping the excess value outside of the construction. And we know a few more that might be just right for you.
