Policy changes relating first residence in 201514 November 2016
In 2015 there will be two important policy changes relating the first resisdence. These are the once-only increased exemption from Gift Tax and concerning mortgage interest.
Once-only increased exemption from Gift Tax
The once-only increased exemption from Gift Tax of 100.000,- is applicable until December 31st, 2014. A person can receive this gift from anyone with the condition that the amount should be used on the house (first residence) of the receiver. This can be an extension of purchase of a new home, or repayment of the mortgage repayment should be done before 1st, 2015, to qualify for the exemption. If it concerns a gift for an extension or other expenses on a current house, the cost will actually have to be paid before 31-12-2016. A gift tax return is mandatory to make use of the exemption. Also a house in another country can qualify for this exemption.
Two temporary rulings relating to the first residence have been made permanent in view of further recovery of the housing market. The maximum period of mortgage interest deduction for a house that is for sale is increased to 3 years instead of 2. Also, mortgage interest deduction is possible, after a first residence has temporarily been rented out. Mortgage interest on a rest debt – mortgage balance remaining after the house has been sold for less than the mortgage value – is deductible for 15 years. The low BTW-rate of 6% (instead of 21%) on maintenance and repair of houses and gardens is extended to July 1st, 2015.
Please contact our office for further questions about these policy changes or to make an appointment.