Spouses in divorce can sometimes be considered for the transitional law

The mortgage interest tax relief

The interest that you pay over your mortgage, can be deducted from your taxable income. Because of this you pay less income tax. This is the mortgage interest tax relief. The mortgage interest is therefore paid to the creditor, while the tax that the debtor must pay over his entire income is less high thanks to the arrangement of the mortgage interest tax relief. The law revision fiscal treatment home determines that for new mortgages the paid interest is only deductible if it concerns a loan that is paid in full in its runtime and at least using the annuity method. This is the case with the linear mortgage and the annuity mortgage. You can, within limits, pay off your mortgage slower and/or incomplete by loaning money for your monthly costs. This is only possible without mortgage interest tax relief.

Transitional law

If you have made a divorce agreement with your partner before the 31st of December, but have not yet been formerly divorced, you fall under the transitional law. This means that the loan you have concluded to buy out your partner, is not obligated to pay in full or at the least using the annuity method. So, even if you choose a different mortgage form, you are entitled to the mortgage interest tax relief. The partner moving out, that buys a new home within the year, can refinance his or her half of the own home debt  on the matrimonial home according to the old loan.

A divorce covenant can be designated for the transitional law as irrevocable, if the following conditions are met:

- It is a matter of a real agreement of which involved parties are bound to irrevocably.
- The written agreement must have been concluded before the 31st of December 2012
- The mortgage on your own residence must, at the latest, be registered in the name of the one buying the own residence
- The purchase- or selling price must be determined in the divorce covenant
- The signed mediation report of a mediator can also be sufficient for the qualification of the transitional law

For anyone signing a divorce covenant and buying out their partner the loan that has been taken out for the purchase amount does not fall under the transitional law. If you therefore take out a loan to buy out your partner, you are obligated to take out the loan for the purchase of the property of your ex-spouse in full and at the least using the annuity method. If you do not do this, you are not entitled to mortgage interest tax relief for that part of the loan.

Sources:

SHE

Article from the FD