Income tax on mortgage loans to be abolished in 2029 

ArmInfo.The Armenian authorities are moving towards a gradual abolition of the program for  returning income taxes to mortgage holders. The National Assembly of the Republic of Armenia at the plenary meeting on June 11, in the second and final reading, discusses amendments to the Tax Code of the  Republic of Armenia.

As Deputy Minister of Finance of the Republic of Armenia Arman  Poghosyan noted in his speech, the government proposes to gradually  narrow the scope of the system both in time and territorially. In  particular, it is expected to establish that after January 1, 2027,  income tax on mortgage loans on the primary market is not refundable  if the property is located in the regions adjacent to the city of  Yerevan - Aragatsotn, Ararat, Armavir and Kotayk. From January 1,  2029, tax refunds will no longer apply in other areas. Restrictions  will not apply to border settlements.

In addition, for mortgage transactions from January 1, 2025, the  total amount of income tax refunded to the borrower or co-borrower  will not exceed 750 thousand drams per quarter.

Earlier the Prime Minister of the Republic of Armenia Nikol Pashinyan  reported that since 2018, thanks to this program, more than 35  thousand families have purchased an apartment.

The program has been in effect since November 2014: citizens who  purchase housing using mortgage lending on the primary market  (apartments in new buildings or new private houses) receive an income  tax refund in the amount of interest on the mortgage. In 2017, the  financial authorities of Armenia stated that the legal norm was aimed  at creating stable and effective demand in the sector, as well as  solving social problems. Meanwhile, the social component turned out  to be insignificant, and state treasury expenses increased sharply.  As a result, from July 1, 2022, a gradual abolition of the income tax  refund system on mortgage loans began in Yerevan. It was noted that  from this moment the income tax will not be refunded to those  citizens who decided to purchase an apartment on a loan in the 1st  zone of Yerevan (center) and received a loan for it after this  period. From January 1, 2023, income tax refunds were canceled for  those who purchased housing in the 2nd zone, and from July 1, 2023 in  the 3rd zone. Then a 1.5 year break is offered. For the rest of the  city of Yerevan, a precondition for obtaining a mortgage loan before  January 1, 2025 was established.