Eliminate the return of taxes for payment of mortgage interest

Until recently, the payment of mortgage interest made it possible to return part of the income tax payment. But suddenly and through a government decree, the repeal of the norm for access to the additional deduction of 3 ITU occurred.

The decree provides for the entry into force of the measure as of the first day of January 2019 and ends the consideration of the payment of mortgage interest as an important expense for the worker.

What is the scope of the decree that eliminates the return of taxes for payment of mortgage interest?

What is the scope of the decree that eliminates the return of taxes for payment of mortgage interest?

Legislative Decree No. 1381 that repeals the tax refund rule implies four important points:

  • It prevents taxpayers from deducting from their tax payment the interest they have paid for their mortgage credit.
  • With the promulgation of the derogatory decree of subsection b in art. 46 of the IR law can no longer add up to 3 ITU accrediting expenses in various areas to the 7 ITU automatic discount.
  • Taxes on the payment of mortgage interest ceased to be the main form of additional deduction, together with medical and legal expenses for hiring professional services and rents.
  • Such a measure is equivalent to not continuing to estimate the magnitude of the importance of the payment of interest accrued on mortgage loans.

Which items can be credited as IR deductible expenses?

Which items can be credited as IR deductible expenses?

Among the items whose accredited expenses allowed to add the deduction of 3 ITU were:  the payment of mortgage interest made it possible to return part of the income tax payment. But suddenly and through a government decree, the repeal of the norm for access to the additional deduction of 3 ITU occurred.

The real estate rental

The real estate rental

  • Hiring independent professional services,
  • Hiring of domestic workers
  • Mortgage credits.

However, with the legislative measure, now the payment of mortgage interest is eliminated within the list of items whose expenses are credible for the return of taxes.