If your home has equity, you may have money left over after selling your property and repaying your mortgage. This realised equity is also known as the eigenwoningreserve (your owner-occupied home equity reserve).
Having equity in your home is of course a good thing. But the government expects you to use that amount to finance your next owner-occupied home.
If you invest your realised equity in your new home, you’ll need a smaller mortgage and the interest on the full loan amount remains tax-deductible.
Do you not use your equity to finance your new home? Then you’ll need a larger mortgage, and you cannot deduct interest on the full amount. The amount of the loan on which you can deduct interest is reduced by the equity.
"}},{"componentType":"paragraph","title":"An example","richBody":{"value":"You and your partner own a home. You want to move, so you sell your home for €200,000. The outstanding mortgage on this home is €150,000. After selling your home and repaying the mortgage, you have an owner-occupied home equity reserve (eigenwoningreserve) of €50,000.
You and your partner buy a new home. The purchase price is €250,000. You take out a mortgage for this amount. Because of the bijleenregeling, you cannot deduct interest on €50,000 of the mortgage. In this case, you can therefore deduct interest on a maximum of €200,000 for the new home.
"}},{"componentType":"sectionTitle","title":"The bijleenregeling doesn’t only apply when you sell your home"},{"componentType":"paragraph","richBody":{"value":"The bijleenregeling applies not only when you sell your home. It can also apply if, due to certain events, your property is no longer considered your owner-occupied home. For example, if your home is rented out permanently, or if you leave your home in the context of a divorce.
It can also play a role when you renovate. If you pay for the renovation yourself, your owner-occupied home equity reserve decreases by the same amount. Suppose you have an owner-occupied home equity reserve of €50,000, and you renovate for €20,000. If you fund the renovation with your own money, the reserve decreases to €30,000.
Do you not pay for the renovation yourself, but borrow the money instead? Then the interest on that loan is not tax-deductible.
"}},{"componentType":"linkList","iconTitle":{"title":"Mortgages"},"textLinks":[{"url":"/en/personal/mortgage/mortgage-calculator","text":"Calculate maximum mortgage"},{"url":"/particulier/hypotheek/actuele-hypotheekrente","text":"Current Mortgage Interest"},{"url":"/particulier/hypotheek/oversluiten","text":"Mortgage refinancing"},{"text":"Buying your first home"},{"url":"/particulier/hypotheek/huis-kopen/ander-huis-kopen/maximale-hypotheek","text":"Buying your next home"},{"url":"/particulier/hypotheek/jouw-hypotheek","text":"Your mortgage"},{"url":"/en/personal/mortgage/mortgage-types","text":"Mortgage forms"},{"url":"/en/personal/mortgage/sustainable-living","text":"Sustainable living"},{"url":"/en/personal/mortgage/mortgage-advice","text":"Mortgage advice"},{"url":"/en/personal/mortgage/advisory-fees","text":"Costs"},{"url":"/en/personal/mortgage/situation","text":"Situation"},{"url":"/en/personal/mortgage/property-services","text":"Property services"},{"url":"/en/personal/mortgage/contact","text":"Contact"}]},{"componentType":"sectionTitle","title":"Your owner-occupied home equity reserve expires after 3 years"},{"componentType":"paragraph","richBody":{"value":"After 3 years, the owner-occupied home equity reserve mentioned above expires. So if you sell your home with equity, you may consider renting for a few years first. If you buy a home again after 3 years, the interest on the full mortgage amount may be tax-deductible again.
Disclaimer
This information has been compiled with great care. It is limited in scope and is intended to provide a general understanding of how the bijleenregeling works. You remain responsible for your own tax position. ING is not liable for any adverse consequences resulting from the use of this information.
The English text of the website is a translation of the Dutch original version. This translation is intended for the customers convenience only. In case of any discrepancies between the two versions, the original Dutch version shall prevail. The mortgage offer and contract will be signed in Dutch. Also, all further communication after signing the mortgage contract will be in Dutch. You acknowledge and accept this. If any assistance or clarification is needed, we recommend contacting your mortgage advisor or to call our customer service via the ING app.
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