Interest on loans
The following interest payments are tax-deductible:
- Interest expenses on a loan you have taken in order to gain or produce income, to invest in corporate stocks, securities or a residential apartment, etc. If you have taken such a loan, you can deduct the year’s interest payments in full.
- Part of the interest expenses on a loan you have had to take when you had made a commitment to repay someone else’s debt, in order to make good on the commitment.
As of the 2023 tax year, no home-loan interest payments, including first-time homebuyer’s home loans, are tax-deductible. In the same way, no interest expenses on other debt such as consumer credit can be deducted.
Please check whether the loan’s purpose of use is pre-filled right
In most cases, the Tax Administration receives information from banks and other credit institutions directly relating to individuals’ home loans and loans for the production of income. Paid amounts of home-loan interest continue to be pre-filled, but taxpayers can no longer claim deductions for it. The pre-filled amounts also include interest paid relating to first-time homebuyers’ home loans.
Check that the intended purpose of the loan is entered correctly on your pre-completed tax return. The purpose has an impact on your deduction rights. Check the amounts and the related information; make corrections if needed.
If you are a shareholder in a partnership that conducts business: If you have borrowed money to buy the partnership shares, the interest expenses are recorded on your personal tax return, not on the partnership’s tax return.
If you are a shareholder in an agricultural partnership: If you have borrowed money to finance any agricultural activities of the partnership, the interest expenses are recorded on your personal tax return, not on the partnership’s tax return.
How to file in MyTax
The Pre-completed income and deductions stage contains the information that has been available to the Tax Administration on your interest expenses on loans. To change or delete interest expenses on a loan, first select the Lender’s name. Now you can make the corrections to the itemised information as necessary. Keep scrolling down to make the itemisation appear in full.
For example, if you had borrowed money to buy the apartment where you have lived, the loan’s purpose has been a home loan. But if you no longer live there and you have rented it out to a tenant instead, the purpose must be changed to “loan relating to production of income”. In this case, you must update the Loan’s purpose of use. It may be that you have a loan that you partially use as a home loan, and partially as a loan relating to production of income. In this case, you must indicate the percentages that reflect this division.
It may be that you pursue an income-producing activity but the income you receive comes from a source outside of Finland – you receive “foreign income”. In this case, if you have taken a loan for this purpose, tick the appropriate box and indicate the loan’s purpose of use.
If you have paid interest on a loan to buy a share in a partnership that conducts business, or on a loan to finance the activities of an agricultural partnership, fill in the interest expenses under Loan relating to source of income.
If no debts or paid interest appear among your pre-filled information, enter data in the Other deductions stage as appropriate. Select Yes for Interest on loan first, and then select Add new interest or loan.
Further information
Read about how interest expenses are deducted when taxes are assessed
How to file on paper
To provide information on a new loan or to edit your deductible interest expenses on paper, submit Form 50B – Capital income and deductions.