The The amounts that taxpayers who paid mortgages were allowed to deduct from taxes were almost laughable., which was a burden. There seems to be a consensus in the Senate regarding the desire to put an end to the treasury’s neglect of taxpayers. In addition, Along with the restitution of the tax for high salaries, some changes were made to improve the situation of those who will have to pay again.
As highlighted the CEO of SDC Tax Advisors, Sebastián Domínguezin a report from the current $20,000 per year that a person can deduct as Non-Taxable Income for the payment of annual interest on a loan with a mortgage It will go to $3,091,035.
“This amount would be updated in September 2024 due to the variation in the Consumer Price Index (CPI) prepared by the INDEC corresponding to the months of June to August 2024, inclusive,” highlights Domínguez, who points out that “The fiscal package will empower the Executive Branch to increase these values during 2024 according to its criteria.”
“Starting in 2025, the update would be semiannual in the months of January and July due to the variation in the CPI corresponding to the calendar semester that ends in the month immediately preceding the month of the update to be carried out,” the report indicates.
The increase in the deduction falls short
The deduction of interest on mortgage loans for Income Tax was introduced in 2001, for financing granted since January of that year. Up to $4,000 per year could be deducted. A regulatory decree, 860 of that year, andHe raised the amount to $20,000 annually.
Domínguez states that ““That value has remained unchanged to date, even when inflation was approximately 73,000%.” Therefore, the tributary states that, “to maintain an equivalent value, should consider a deduction of just over $15,000,000 instead of $3,091,035.”
How much can you save
According to the CEO of SDC Asesores Tributarios, in the case a UVA + TNA 5.5% mortgage loan for 20 years equivalent to $100,000 ($91,600,000), the interest on the first 12 installments would be 5,057.62 UVAs. If the current value of UVA is taken as $983, the interest would be equivalent to $4,973,410, which would exceed the deductible value.
The report clarifies that a part of the interest in pesos would not be deductible due to the effect of inflation on the daily adjustment of the UVA.
For the interest to be fully deductible, the loan would have to be around $56,000,000 (USD 61,135). As detailed, the maximum annual tax savings would be $1,081,862.25 and would apply to a person who pays Income Tax on the scale of 35% and can deduct $3,091,035 of interest.
“The update of the amount of the interest deduction for mortgage loans for the purchase or construction of properties intended for the taxpayer’s home, even when it is considered that it could be higher, is good news,” said Domínguez.
And he added that this “is one more incentive for people to access their first home or, if they already have it, move to a larger one and/or with greater amenities.”
Mortgages do not take off
According to data from the stock exchange The First Capital Group, mortgage credit lines, including those adjustable by inflation/UVA, during April had a decrease of 0.2% with a balance of $589,352 million. In year-on-year terms they rose nominally by just 47%.
Guillermo Barberopartner of the entity, indicated that “The announcement of new lines adjustable by UVA by several entities of the Public and Private Sector have generated great expectations in the public due to a perception that real estate prices could be relegated to inflation.”
“Although the balance of the loans will be updated by an index close to the CPI, it is understood that properties could grow above it, generating some opportunities for buyers who use this tool”Barbero assured
Source: Ambito
