Mortgage interest deduction in the Netherlands: what expats should know
27 August 2025 •
Author: Youri
The Dutch mortgage interest deduction, hypotheekrenteaftrek or HRA, reduces your taxable income by the interest you pay on your primary residence. It’s back in the policy spotlight, with talk of simplifying the tax system and even phasing HRA out over time. Here’s why that matters if you live and work in the Netherlands as an expat.
Photo: Mortgage interest deduction in the Netherlands: what expats should know
Why this is on your radar now
- Policy debate: Several parties argue for a gradual reduction of HRA, often paired with lower income-tax rates as compensation. Others want to keep it. The direction is political, but a change is plausible.
- 2031 clock (what it actually means): The 30-year limit on interest deductibility will start expiring for older loans in 2031. If you’re buying now, your own 30-year clock starts at your first interest payment, so 2031 itself usually isn’t your deadline.
Why expats are affected differently
- 30% ruling & net benefit: If you receive the 30% ruling, your taxable salary in box 1 is lower. Because HRA lowers taxable income, the value of the deduction can be smaller than you might expect without the ruling.
- Mobility & time horizon: Many expats don’t plan to own for 20–30 years. If HRA changes while you’re here, it can shift your net monthly costs during your stay.
- Cross-border life events: Moving country, switching tax residency, or renting your home out later can change whether the property still qualifies as your primary residence for HRA.
What could change and how to stay prepared
- If HRA is reduced quickly, net monthly costs can bump up in the short term; a longer, phased approach spreads the impact.
- Any reduction could be paired with lower income-tax rates, partly offsetting the loss. Your personal effect depends on income, loan size, interest rate, and whether you use the 30% ruling.
Our view (what we think is sensible)
If the Netherlands does change HRA, do it gently and coherently:
- Long transition (15+ years). Predictable, small steps; no shocks.
- Scrap the imputed-rent charge (eigenwoningforfait). Fewer moving parts, simpler for internationals to understand.
- Lower the first income-tax bracket. Clear, broad compensation that you feel immediately.
- Defiscalise the primary residence. No HRA, no imputed rent, and your home kept out of box 3. One stable, easy-to-explain regime.
Your next steps (quick checklist)
- Run the numbers: Calculate gross and net monthly costs for a few scenarios (with/without HRA, different phase-out speeds).
- Pick the right mortgage shape: Term, repayment method, and fixed-rate period should match your likely time in the Netherlands.
- Build a buffer: Policy and rates can change; cash cushions keep you comfortable.
