Home equity scheme
The surplus value released when selling your old home must be reinvested if you purchase another home within three years. If you do not do this and take out a loan for the full purchase price of your new home, you will not be entitled to mortgage interest deduction on the loan amount equal to that surplus value. Ask your advisor about the tax conditions.
The home equity scheme, why was it introduced?
Mortgage interest deduction was originally introduced to promote homeownership. If you borrow money for the purchase, maintenance, or improvement of your own home, the interest is tax-deductible. Many people tried to take full advantage of this. When moving house, they financed the new home entirely while using any surplus value from the old home for other purposes. To discourage this behaviour, the home equity scheme was introduced on 1 January 2004.
Maximum tax benefit
Despite the home equity scheme, there are still plenty of opportunities to achieve maximum tax benefits. Our advisors know them all, will conduct a thorough analysis of your personal situation, and will be happy to outline everything for you.