Deduction of interests due to mortgage loans
Accountancy may be a complicated topic for some people. Occasionally, taxpayers ignore the deductions to which they have the right and tend to leave them unused, despite their importance.
Deductions are the payments or expenses natural persons make to protect themselves. These protections are usually personal or for their families due to their relationship asparents or children. This way, the taxed amount on the annual tax return may be reduced.
> It may be of your interest to read our entry: Annual tax return of natural persons
Any natural person can apply a deduction, despite the tax regime, and can be made effective in the moment the annual Income Tax (ISR) payment is made.
Deductions are expenses that will reduce the obligations in the payment of the annual tax return. These can be personal and classified in categories including health, education, donations, funeral expenses, and mortgage loans.
Deductions of mortgage interests were established in 2004.
All Mexicans that pay a mortgage loan can obtain a devolution from by the Tax Administration Service (SAT) and can deduce the interest paid from this. However, these should not surpass inflation. There must be an annual report of the interests accrued and paid from the mortgage loans destined to a household.
If you are paying for a household with a mortgage loan, you can obtain a tax benefit and deduce ‘’the real interests accrued and effectively paid during the fiscal year of the previous year, through the institutions that are part of the financial system’’, that is, INFONAVIT and FOVISSSTE, among others. Mortgage interests can be deduced only when the value of the loans does not exceed 750.000 UDIs (investment units).
The deduction of the interests of a mortgage loan is established in Article 151, Clause IV of the Income Tax Law (LISR). Only the credit of a single household can be deduced because it is a benefit for low-income individuals, and thus financial institutions determine that owning more than one household denotes that the person receives high income.
*Deductibility does not apply with mortgages that exceed 4.5 million pesos.
Resort to a certified accountant to carry out the determination and presentation of tax return and payment. This will help you obtain the best benefits.
In QuAdrans Law and Finance we offer accounting advice to orient you during any accounting process you need.
