When we talk about interest deductions on mortgages, are we referring only to the first home? Not really: here are all the cases.
The interest expense on mortgages represents a precious help addressed to first home buyers. In fact, annually it is possible to deduct them on the tax return: that is to say that a portion of this interest, linked to the monthly payment of the mortgage installments for buy your own home, it will actually be reimbursed in the form of deductions.
In this way it will be possible to get back part of what was spent, thus amortising the costs of the mortgage, which increased exponentially during 2023 following the continuous increase in rates by the ECB. But not everyone knows that it is not just the purchase of the first home that predicts the deduction of interest expense on mortgages; So how can you take advantage of this benefit in another way? Let’s clarify.
Interest expense deduction on mortgages: not just first homes
There are numerous mortgages in progress for which, when filing your tax return, it will be possible to obtain a tax deduction for part of the interest paid. In the case of the first home, or the main residence, this deduction amounts to 19% on a maximum annual expense of 4000 euros. This means that every year, for the entire duration of the mortgage, significant savings can be achieved up to that amount using credits as compensation or receiving them back in the form of a refund.
This tax benefit also applies in other cases, each of which is reported on the 730 model with a specific line that we are going to analyze below. In the case of Line E7, reference is made to the mortgage loans relating to the purchase of the real estate unit to be used as a home. Instead, line E8-E10 concerns the other cases. That is, interest on mortgage loans stipulated before 1993 for the purchase of other properties, to be indicated with code 8. Code 9 refers to interest on mortgages contracts in 1997 for building recovery.
Again, code 10 and 46 concerns mortgage interest for the construction of the main house. And finally, codes 11 and 47 refer to interest relating to agricultural loans or mortgages. It is therefore important, in order to benefit from the deduction, to pay close attention to both the lines and the specific codes, each of which identifies one of the types of mortgage included in the relief.
