House paid off – Deregister mortgage

For many homeowners, it is a nice milestone when the mortgage is finally repaid. Your monthly payments decrease immediately because you no longer pay repayment and mortgage interest and that makes a big difference in your wallet. But you have to arrange a number of things, such as deregistering the mortgage. In this article you can read what it means when your mortgage is repaid.

House paid off – Deregister mortgage

House paid off - Deregister mortgage

When you took out the mortgage, you had to have a mortgage deed drawn up by a notary and have it registered in the registers of the Land Registry. The repaid mortgage must be deregistered, but you do not have to arrange this immediately. If you plan to take out a mortgage again at a later date with the same mortgage lender, it is even cheaper to not deregister the mortgage. The mortgage then remains in effect in these registers, so you do not have to re-register the new mortgage later.

But if you no longer want a new mortgage, it is better to arrange the deregistration yourself before you sell the property. After the sale, the new buyer establishes a new mortgage on the home. He calls in a notary for this himself and he arranges the deregistration of the mortgage in your name. At that time you do not choose the notary yourself, but the new buyer. There is a chance that you will pay higher notary fees than if you choose a notary yourself.

The costs for writing out a mortgage differ per notary. One notary charges less than 100 euros, the other charges more than 400 euros. So a good comparison of the rates saves a lot of money.

Mortgage repaid – Notional rental value

Mortgage repaid - Notional rental value

You pay the notional rental value in box 1 each year. For most houses, this amounts to 0.7 percent of the home value. For a home worth 250,000 euros you pay 1,750 euros per year. The Tax and Customs Administration settles this tax with the mortgage interest deduction to which you are entitled. After the repayment of the mortgage, the notional rental value lapses, as does the mortgage interest deduction.

Mortgage repaid – Other taxes

Mortgage repaid - Other taxes

A repaid mortgage continues to fall in box 1, but this no longer has consequences for the tax. You no longer pay a notional rental value and your right to deduct the mortgage interest. But as long as you continue to live in the house, the house still falls into box 1. Sometimes homeowners fear that the house will be moved to box 3 after the repayment, and that they will therefore have to pay capital gains tax on the house. But that’s not right. However, the property tax (property tax) that you pay the municipality remains in force.

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