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How to deduct the interest on the loan for the year 2016?

Acquisition of own housing is supported by the state and the possibility of a tax deduction for interest paid on a mortgage or loan from building savings during 2016. The tax base can be reduced by up to CZK 300 000. However, when not to deduct interest paid claim?

Since the tax base can deduct interest paid on a home loan, which is dealt their own housing situation, whether it is a mortgage or a loan from the savings. Own housing needs are not met eg. For vacation homes or rental properties. Also, it can not claim a tax deduction if the property is built within the business. "The tax deduction can be applied even in the land, provided, however, that construction must begin on the property within 4 years after the conclusion of the loan agreement," says Emil Brooch (FinFocus).

Where the stated interest paid?

In a two-page tax form that can be used for the 2016 people who have only income from work (employment), the total annual tax deduction for interest brought into line with the No. 26 in a four-page tax form that apply to all other taxpayers, the interest deduction states the line number is 47. As attachment to the tax return must be accompanied by documents authorizing a tax deduction. "The first application of the tax deduction shall be submitted to the relevant agreement and confirmation from the bank in the coming years you can just confirm from the bank," says Emil Brooch.

How progresses more parties to the contract?

A party to the loan agreement may be more people, eg. Partners or spouses. In this case, the tax deduction will apply in full by one person or all people equally. In practice, it is therefore possible that one party exercised 60% and another 40% tax deduction. Parties to the treaty should always be well calculate one tax credit applies. The annual taxable income 165 600 CZK for the year 2016 is in fact a tax on personal income 0 CZK a tax deduction in such cases does not provide any tax savings. When sufficient taxable income means each one thousand tax deduction, the tax savings in the amount of CZK 150. If they were diverted during the advance on income tax, then because of the application of the tax deduction for mortgage may be entitled to a refund of personal income tax. Interest paid on mortgages reduce the tax base for the whole year and even employees can not claim a tax deduction during the year.

Taxation of tax deductions

In practice, as well as additional taxation applied tax deductions from previous years, if there is a breach of the statutory conditions. When there is no construction on the land in which it is applied tax deduction, for various reasons made within the required four years, then it must claiming tax deductions from previous years back dodanit. The tax liability for the year is consequently higher. Claiming tax deductions in recent years are the income according to § 10 of the Income Tax and the need to fill in Annex number two tax returns.

Lower tax liability reduces the cost of mortgage

The overall tax savings due to the application of the tax deduction on the tax return during the mortgage is required to include in the calculation of credit costs. Deduction of interest paid is reducing the overall cost of the mortgage. The deduction is possible, however, apply only for mortgages, which solved their own housing situation taxpayer does not apply to so-called non-purpose. US mortgages. Choosing a mortgage is not always necessary to devote sufficient time and it is good to consult with an expert, because every loan applicant is in a different situation, and what is advantageous for someone, somebody else might not.

Source: tz, editorially modified

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