Q:
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What items are included in the housing mortgage interest when calculating special additional deduction on IIT?
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A:
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It covers the mortgage interest of the first residential house that a taxpayer, and his/her spouse either individually or jointly, acquired by taking the house provident fund or mortgage from a commercial bank.
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Q:
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How is the housing mortgage interest deduction works as special additional deduction items?
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A:
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During the years of the mortgage interest occurs, RMB1,000 is deductable per month. The deduction is only applicable for a maximum of 240 months. The deduction shall start from the month of mortgage contract begins, till, the contract ends or the mortgage is cleared. An individual taxpayer can apply only once for the housing mortgage interest deduction on IIT.
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Q:
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Who is the subject for housing mortgage interest special additional deduction on IIT?
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A:
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The two spouses can decide which one of them takes the deduction from his/her IIT. Once the decision is made, it cannot be changed during the same tax year.
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Q:
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What is the time frame for housing mortgage interest deduction?
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A:
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The maximum deduction period is 240 months. After 240 months, there will be no housing mortgage interest deduction applicable. Since 2019, taxpayers can apply for the deduction, as long as they have housing mortgage interest occurring.
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Q:
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If both spouses have their own house acquired before marriage, how should they apply this deduction?
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A:
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In the case where both spouses have house acquired before marriage and both of their houses have interest occurring, they should choose one of the houses for deduction. Afterwards, the couple can choose between either the purchaser takes the deduction in full, or the couple share it equally. Once the decision is made, it cannot be changed during the same tax year.
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Q:
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How does the first house mortgage interest is defined in the housing mortgage interest special additional deduction on IIT?
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A:
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In the regulation of housing mortgage interest special additional deduction on IIT, the first house mortgage is the loan that applies the first housing mortgage interest. The regulation also specifies that taxpayers can only have the interest deduction once. In practice, it happens when taxpayers taking mortgage to purchase a house for the first time. That is, the first house that a taxpayer purchases on mortgage basis, is subject to housing mortgage interest special additional deduction.
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FAQ
