Home loan facility
When you sell your own home and buy another, you may encounter the 'bijleenregeling' (loan principal rule). This may mean you cannot deduct all of the (mortgage) interest when you buy a new home.
What does this scheme involve?
If you sell your home and the net proceeds (sale price minus selling costs) are higher than your owner-occupied home debt (the amount on which you can deduct interest), you have a surplus value, the so-called ‘owner-occupied home reserve’ (surplus value from your old home and any previously arising surplus value).
If you are taking out a mortgage or loan for your new home, you can deduct the interest on a maximum of the purchase price of the new home plus any renovation costs minus the private home equity reserve.
The scheme also applies if you decide not to sell your own home but to rent it out permanently. In the case of temporary rental, because you cannot sell the property, an exception to this rule is possible.
If you sell your home and do not purchase a new home immediately, the capital gain will be held in a private home reserve for three years. If you take out a new mortgage within this period, it will be deducted from the maximum deductible mortgage. After three years, the private home reserve will expire, and you will be able to take out a higher maximum deductible mortgage.
