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Tax relief on the interest charged on loans used to purchase a principal residence - 25 February 2010

The scheme introducing tax relief on home loan interest was announced in 2007. Introduced to encourage home ownership, this scheme allows you to claim income tax relief on part of the interest you pay on your home loan over a period of 5 or 7 years.

How you benefit from tax relief on home loan interest

  • Are you eligible for tax relief on home loan interest? 
    Every taxpayer who buys their own principal residence is eligible for this scheme. No income condition is applied. 

  • How much tax relief can you claim?  
    Are you buying your own principal residence? If you are, you can claim this tax relief.
    - In Year 1 (any 12-month period, but not necessarily a calendar year), you can claim tax relief on up to 40% of the interest you pay (within the maximum limits imposed).
    - Over the following 4 years, you will be able to claim tax relief on 20% of the interest you pay (within the maximum limits imposed).
  • Is your new home eligible for the “Haute Performance Énergétique” (High Energy Performance) label?  If so, then you will be able to claim tax relief on 40% of the total amount of interest you pay over 7 years!

Please note: the amount of interest on which tax relief can be claimed is subject to the following maximum limits:

  • €3,750 for singles, divorcees, widows and widowers, 
  • €7,500 for a couple taxed jointly (whether married or living together under a registered civil partnership)
  • These upper limits are increased by €500 per dependent person, and are doubled where a member of the household is disabled.
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You can claim this tax relief even if you have no tax liability

The tax relief is deducted from the income tax of the taxpayer. If the amount of tax relief is greater than the amount of tax payable, the difference is paid to the taxpayer.
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Who should you contact to apply?

You should inform the tax authorities of your property purchase and the amount of interest you pay. The correct amount of loan interest will then be deducted on the basis of your tax return.

For more information and a personal analysis of your case, please call a Bouygues Immobilier advisor on 00 33 (0)1 55 18 70 00.
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