Mortgage Interest Deduction in the Netherlands: What Every Expat Needs to Know

The mortgage interest deduction in the Netherlands — known in Dutch as hypotheekrenteaftrek — is one of the most valuable tax benefits available to homeowners, yet it is also one of the most misunderstood rules among expat buyers. In short: you can deduct your annual mortgage interest from your taxable income, reducing your effective monthly housing cost. However, the benefit is capped, the eligibility rules are strict, and 2026 brings specific legislative changes that most English-language sources have not yet caught up with. At Expat Mortgage Platform, we navigate the mortgage interest deduction in the Netherlands every day on behalf of international clients, and the sections below reflect exactly the questions we hear most often.

What is the mortgage interest deduction rate in the Netherlands for 2026?

The maximum deduction rate for 2026 is 37.56% — and this applies regardless of your income tax bracket. That surprises many of our clients, particularly those earning above €79,137, who fall into the Dutch top tax rate of 49.5% and assume their deduction works at that same rate. It does not.

Since 2023, the deduction has been permanently linked to the rate of the second income tax bracket. In 2026, the two relevant brackets are:

• First bracket: 35.70% (income up to €79,137)
• Second bracket: 37.56% (income above €79,137)

High earners above the €79,137 threshold can deduct at 37.56% — not 49.5%. In practice, the higher your income, the larger the gap between the tax rate you pay and the rate at which you recover interest through the deduction. The rate did increase marginally from approximately 37.48% in 2025 to 37.56% in 2026. Always verify the exact current figure on the Belastingdienst official website before filing your return.

Worked example: If you paid €9,000 in mortgage interest over the year, your tax saving is roughly €9,000 × 37.56% = €3,380 per year, or about €282 per month. For a typical expat mortgage in Amsterdam, that is a meaningful reduction in monthly housing costs.

One scenario we see regularly: a senior engineer earning €110,000 discovers — only after signing — that their effective deduction rate is 37.56%, not 49.5%. The gap costs them around €1,000 per year in expected-but-never-delivered tax savings. Understanding the cap before you buy is essential.

Who qualifies for the mortgage interest deduction as an expat in the Netherlands?

Eligibility for the Dutch mortgage tax deduction rests on four core conditions that we check for every client before purchase:

1. Resident taxpayer (box 1): You must be a tax resident of the Netherlands. Non-residents are generally not eligible unless they qualify as kwalificerende buitenlandse belastingplichtigen (qualifying non-resident taxpayers) — a specialist area where we strongly recommend tailored advice.
2. Primary residence only: The property must be your main home. Investment properties and rental homes do not qualify.
3. Annuity or linear repayment structure: For mortgages taken out after 1 January 2013, the loan must follow an annuity or linear repayment schedule and be fully repaid within 30 years. For a clear explanation of how an annuity mortgage works in practice, see our guide on what an annuity mortgage is and how it is structured.
4. Maximum 30-year entitlement: The deduction clock starts the moment you take out the mortgage.
   
   

Pre-2013 interest-only mortgages fall under transitional rules (overgangsrecht), meaning the deduction can still apply — but only to the original loan amount. If you increase an old interest-only mortgage, the transitional protection does not extend to the new portion.

30% ruling holders: The ruling reduces your taxable income base but does not grant a separate or enhanced deduction right. Furthermore, the interaction between the 30% ruling and mortgage affordability is nuanced. We cover this fully in our foreign income mortgage deep-dive — if your salary is paid in a non-euro currency or under the 30% ruling, start there.

For a step-by-step walkthrough of the full mortgage eligibility process, our how to get an expat mortgage in the Netherlands guide covers every stage from pre-approval to completion.

Which mortgage costs can expats actually deduct — and which ones cannot?

This is where the mortgage interest deduction in the Netherlands gets granular — and where many expat buyers leave money on the table by not keeping receipts from their purchase year.

Deductible costs include:

• Annual mortgage interest payments
• NHG guarantee fee (one-off, claimable in the year of purchase)
• Valuation (taxatie) costs
• Mortgage advisory and broker fees
• Notary fees for drawing up the mortgage deed (not the deed of conveyance)
• Penalty interest when refinancing
  
  

NOT deductible:

• Notary fees for the deed of conveyance (leveringsakte)
• Estate agent commission
• Transfer tax (overdrachtsbelasting)
• Bank guarantee costs

Practical tip: advisory and valuation fees are only deductible in the year they are incurred — you cannot carry them forward. Keep every purchase-year invoice in a dedicated folder.

One further adjustment to factor in is the eigenwoningforfait. The Dutch tax system adds a notional rental value back to your taxable income to partially offset the deduction benefit. In 2026, that rate is 0.35% of the WOZ (assessed) value of the property. For properties valued above €1.35 million, a higher rate of 2.35% applies to the surplus. This means the net tax benefit of the deduction is always slightly lower than the headline 37.56% figure suggests.

How do I claim the deduction — and can I receive a monthly refund?

No separate application is required. The mortgage interest deduction in the Netherlands flows automatically through your annual Dutch income tax return (aangifte inkomstenbelasting) in box 1. However, waiting until the following spring to receive a lump-sum refund is not your only option.

For monthly payments, apply for a voorlopige teruggaaf (provisional tax refund) via Mijn Belastingdienst. This pays your estimated saving in monthly instalments throughout the calendar year, which improves cash flow from day one. The steps are straightforward:

1. Log in to Mijn Belastingdienst with your DigiD.
2. Navigate to Voorlopige teruggaaf.
3. Enter your expected annual mortgage interest for the year.
4. Submit — the Belastingdienst typically processes this within a few weeks.

Our recommendation to new expat homeowners: set this up in the same month you complete the purchase. Every month you delay is a month of refund you cannot reclaim retroactively within the year. To estimate your annual interest payments accurately before submitting, our mortgage calculator Netherlands guide walks through the calculation in detail.

What is the Wet Hillen — and why did it get worse in 2026?

The Wet Hillen was designed to protect mortgage-free (or nearly mortgage-free) homeowners from the full weight of the eigenwoningforfait. Without it, paying off your mortgage faster would actually increase your tax bill — a perverse incentive. The Wet Hillen counterbalances this by reducing the taxable notional rental value when mortgage interest is low or zero.

However, the Belastingplan 2026 — approved by the Tweede Kamer — accelerated the phase-out of this protection. The reduction rate increased from 3.33% per year to 4.8% per year, moving the scheduled full abolition from 2048 to 2041. In 2026 specifically, the Hillen deduction equals 71.867% of the difference between the eigenwoningforfait and the mortgage interest actually paid.

Moreover, this change is not widely reported in English-language expat content — which is exactly why it catches people off guard. Expats who are aggressively overpaying their mortgage, or who plan to be mortgage-free well before 2041, should factor this into their long-term financial planning now. The tax advantage of being mortgage-free will continue to erode until 2041.

What is the 2031 mortgage interest deduction cliff — and should expats be worried?

This is the most significant current policy risk surrounding the Dutch mortgage tax deduction — and one that almost no English-language source has covered in depth.

In May 2026, civil servants from the Ministry of Finance sent a formal report to parliament warning that approximately 1 million Dutch homeowners risk losing their mortgage interest deduction entitlement from 2031 onward, when their 30-year deduction window expires. The problem is primarily concentrated among holders of interest-only mortgages taken out before January 2013 — before the mandatory repayment requirement came into force.

The deeper complication is institutional: no government agency — not the Belastingdienst, not banks, not mortgage advisors — is legally permitted to retain data on how long an individual has been claiming deductions. Data retention rules prevent this. As a result, neither the Tax Authority nor the homeowner can easily determine exactly how many years of entitlement remain on a given loan — especially if that homeowner has moved house, divorced, or refinanced in the intervening years.

The Ministry of Finance has outlined two broad policy options:

• Option A: End all deductions on pre-2013 interest-only mortgages simultaneously in 2031. This would cause a large group of homeowners to receive fewer than 30 years of deductions — potentially triggering legal challenges.
• Option B: Extend the cut-off to 2043, ensuring every pre-2013 mortgage holder receives at least 30 years. This would cost the Treasury an estimated €1.4 billion per year and allow some homeowners to claim beyond their 30-year entitlement.

Ministry officials explicitly warned parliament that significant legal proceedings are expected from 2031 under either scenario. For homeowners, losing the deduction abruptly could represent a substantial increase in monthly housing costs.

What this means for expats specifically: If you purchased a property with a pre-2013 interest-only mortgage — either as an original buyer or as a subsequent buyer who took over such a mortgage — your remaining deduction entitlement may be shorter than you assume. We recommend reviewing your mortgage deed date and structure as a matter of urgency. Our advisors at Expat Mortgage Platform can assess your specific situation and model the financial impact of both policy scenarios.

Does the NHG guarantee affect my mortgage interest deduction?

The Nationale Hypotheek Garantie (NHG) threshold in 2026 is €435,000 purchase price. For properties at or below this value, NHG provides a government-backed guarantee that typically unlocks a lower lender interest rate.

From a tax perspective, the one-off NHG guarantee fee is fully deductible in the year of purchase — making NHG mortgages doubly attractive. Furthermore, while the lower interest rate means a slightly smaller annual deduction in absolute terms, the lower gross mortgage cost more than compensates in the vast majority of cases. The net financial effect of NHG is almost always positive for eligible expat buyers.

Full NHG eligibility criteria — including income requirements and property conditions — are explained in our step-by-step expat mortgage guide.

Is the mortgage interest deduction going to be abolished in the Netherlands?

The short answer is no — not imminently, and no political party is currently proposing full abolition of the Dutch mortgage tax deduction.

The longer answer requires some nuance. The deduction has been progressively capped since 2014, with the phase-down for higher earners completing in 2023. No further rate reductions are planned for 2026 through 2030. The political debate remains active: many economists argue the deduction distorts the housing market by inflating prices and disadvantaging renters, while supporters maintain it is essential for making homeownership accessible. Research published in the context of the CDA’s first-time buyer proposals raised doubts that abolishing the relief would actually make homes more affordable — without the deduction, first-time buyers would lose a key financial advantage.

Meanwhile, the 2031 cliff situation (described above) may force indirect policy decisions before 2028. Expats buying today should plan on the current 37.56% cap for the foreseeable future, but those holding mortgages beyond 2030 — particularly pre-2013 interest-only structures — should seek specialist advice well in advance of any legislative changes.

At Expat Mortgage Platform, we monitor Dutch mortgage tax legislation continuously and update our clients whenever material changes are announced. If you want a personalised assessment of how these rules apply to your situation, speak with one of our advisors or calculate your maximum mortgage.