Regarding tax discount for using a mortgage housing loan

Press service of the State Tax Service of Ukraine, published 06 October 2023 at 13:46 Chapter: News

Tax discount for individuals who are not business entities is a documented amount (cost) of expenses incurred by a resident taxpayer in connection with the purchase of products (works, services) from residents – individuals or legal entities during the reporting year, which is allowed to reduce his/her total annual taxable income, received as a result of such reporting year in the form of salaries and/or dividends, in cases specified by the Tax Code of Ukraine (hereinafter – Code) (Sub-paragraph 14.1.170 Paragraph 14.1 Article 14 of the Code).

That is, tax discount is a documented amount of expenses by which taxable income in the form of salaries is reduced, as a result of which a part of paid personal income tax is returned from the budget.

Main conditions for obtaining tax discount

1. Tax discount can be granted only to a resident of Ukraine who has registration number of the taxpayer's registration card.

2. It is allowed to use right to calculate tax discount only according to consequences of the reporting tax year. This right is not extended or transferred to the following year, if citizen has not used this right within the prescribed period.

3. Receiving income in the form of salaries. At the same time, the total amount of tax discount cannot exceed amount of the annual salary in the current year.

Attention! Individual-entrepreneur who is employed individual is entitled to tax discount only for income received during a year in the form of salaries.

4. Compliance with requirements regarding procedure for submitting and filling out declarations. Declaration is submitted up to and including December 31 (and if there is obligation to declare income – until May 1) of the following reporting year.

Taxpayer has a right to include in tax discount, in particular, a part of the amount of interest for use of a mortgage housing loan actually paid during the reporting tax year, provided there is documentary evidence of expenses included in tax discount, and provided that object of housing mortgage is recognized as main residence place, in particular according to the mark in a passport about registration at the location of such housing.

Right to include in tax discount amount calculated according to Article 175 of the Code, is granted to the taxpayer under one mortgage loan for 10 consecutive calendar years starting from year in which, in particular, the constructed object of the residential mortgage becomes the taxpayer’s property and begins to be used as main residence place (Paragraph 175.4 Article 175 of the Code).

Learn more about tax discount for using housing mortgage loan here.