Finance Ministry considering dropping tax exemptions on home loan interest

Finance Minister Maris Lauri. (ERR/Martin Dremljuga)
1/12/2015 10:50 AM
Category: Politics

Tax on mortgage interest could be restored after the elections, after having been deductible for 12 years, said Finance Minister Maris Lauri.

Lauri, who represents the Reform Party, told ETV tax on home loan interest could be restored as OECD and the Bank of Estonia have both advised the government to cancel the exemptions.

“I personally believe this should be tackled. But I must emphasize that if such a decision is taken, realistically it will take a few years to enter force,” Lauri said.

The coalition partner, the Social Democrats, said they would not rule out such a move but would not take the initiative on the subject. “This is not a fundamental thing but right now I can tell you the Social Democrats do not have it in their sights to find cover for promises,” MP Rannar Vassiljev, head of the Finance Committee.

Center Party MP Kadri Simson said her party would not back cutting the tax exemption as it helps people who have had to purchased their own homes.

IRL took a similar stance.

“We see this as giving state help to people and as a means to stimulate the real estate market,” IRL's Sven Sester said.

On average, the state refunded 120 euros in tax paid on home loan interest in 2013.

L. Viirand, J.M. Laats

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