Which moving costs are tax deductible?
Moving house is exciting and stressful. A new house means the beginning of a new part of your life! Housing is, unfortunately, not free. Buying a house, renovations, hiring a moving company...the costs can spike quickly. Lucky for movers, many of their costs are tax-deductible, and you might even have a right to a "tax allowance" of sorts from the government! All you need to do is file your taxes properly. The costs which are tax deductible depend on whether you're moving as an individual or a company, but ScanMovers is here to explain some of the most important rules:
Deductible moving costs as an individual
Let's just kick in the door on this one: as an individual most moving costs are in principle not fiscally deductible. If you're moving because of a new job you may be able to discuss an allotment for this expense. The real way to save money on moving is a a detour of sorts. To save money, you can take our a loan to pay for your moving, and when filing your taxes fill out box 3. You might get nearly €3.000 in tax benefits, and if you have a fiscal partner you might have a right to nearly €6.000 in tax benefit!
Deductible moving costs as a company
If you are moving as a company, there are some rules that are quite valuable. As a corporation or an entrepreneur most moving costs are up to 30% fiscally deductible if your home also functions as your office. The moving costs associated with moving your personal effects, however, don't fall under this rule. This makes it important to make sure you are clear about which costs are associated with moving your office, and which are associated with personal items.
Fiscally-deductible moving costs
Like we've said earlier, moving can be quite expensive. It's no wonder that it helps to know that some moving costs are fiscally deductible. These costs are not allowed to be deducted from the total price, but should be deducted from taxable income. This means as a company that you need to show these costs in Box 1 of your tax receipt. The amount you'll eventually be returned is dependant on the tax rate that comes in Box 1. The tax rate is dependant on your age and income. If you have a fiscal partner, this can be very helpful as you can split the deductible costs over both of your incomes.
The following moving costs are tax-deductuible in Box 1 from your income tax:
► Real estate taxes
► Costs accrued in obtaining a mortgage. Think here of notary costs of the contract, the costs of the mortgage itself, registration with the government, mortgage advice, and middle-man costs.
► Costs accrued in requesting the Nationale Hypotheek Garantie (NHG) and the costs of an architechture in the case it's necessary for the NHG.
► Commission of the bank of to lock in a certain interest rate.
► The closing provision of the mortage up to 1.5% of the loan, or a maximum of €3630 per taxable income.
► The housing cost insurace.
► Periodic payments of the land lease, building, and closing costs.
► Costs made in connection with closing the loan (travel costs, phone costs etc.)
► Paid building and land interest costs after signing of the final purchase agreement.
Not fiscally-deductible moving costs
All the the above mentioned costs are fiscally deductible, but unfortunately there are costs that are not covered and therfore fully in your hands. These are:
► Middle-man costs like the estate agent's fee
► The 'costs for buyer' amount at the purchase of a house
► The 'free at name' amount at the purchase of a house
► Rennovation and maintinence costs
► Purchase- and sales tax
► Cost of paying off land lease, base interest rates, the right to build or of stoppage.
► The notary costs of the the ownership act.
► The bank guarantee
► The cost of utilities
► The building- and base -interest before the signing of the final purchase agreement.
Miscellaenous other non fiscally-deductible moving costs
Next to these, these are a few other moving costs which are never tax deductible:
► Mortgage repayment
► Interest and costs that are not meant for the house
► Premiums of home capital-insurance
► Savings for own home to a savings account
► Interest and loan as a result of an additional loan agreement
Do you still have questions about fiscal deductions, comparing moving companies, or comparing moving offers? Please get in touch with us and we'll get back to you as soon as possible. Good luck with your move!