ArmInfo. Income tax refunds for mortgage lending in the first half of 2024 increased by 8 billion drams compared to the same period in 2023. This was stated by the head of the State Revenue Committee (SRC) of Armenia Rustam Badasyan on September 2 at a meeting of the parliamentary committee on financial and budgetary issues while discussing the report on the state budget execution for the first 6 months of this year.
In particular, during the reporting period, the number of beneficiaries was 42,053 people and the amount of refundable income tax reached 32 billion drams, compared to 24 billion drams for the same period in 2023. Recall that the program has been in effect since November 2014: citizens who purchase housing with a mortgage loan on the primary market (such as apartments in new buildings or new private houses) are eligible to receive a refund of income tax equal to the amount of interest paid on the mortgage.
If in 2015, 273 million drams were allocated for income tax refunds, then in 2022 the number of beneficiaries was 29,199, and the refunded amount was 36.5 billion drams. In 2023, 51.9 billion drams were refunded to 38,911 beneficiaries of the program. In total, from 2015 to 2023, 141.1 billion drams were refunded from the state budget to citizens who took advantage of the income tax refund program. This year, it is expected that the refunded amount will be around 72 billion drams. Back in 2017, the financial authorities of Armenia stated that the legal norm was aimed at creating a stable and solvent demand in the sector, as well as solving social problems. As a result, the authorities began to introduce various restrictions. From July 1, 2022, the gradual abolition of the income tax refund system for mortgage loans began in Yerevan. The process started in the center of the capital and will be completed by 2025. At the beginning of this year, the Armenian government proposed to reduce the maximum amount of income tax that the state returns to the "mortgage holder" to no more than 750 thousand within one transaction, instead of the current 1.5 million drams (per quarter), for mortgage transactions starting from January 1, 2025.
In addition, the Armenian authorities plan to fully eliminate the income tax refund for mortgage loans by 2029. This abolition will be implemented gradually. Starting from January 1, 2027, income tax on mortgage loans in the primary market will not be refunded if the property is located in the regions surrounding the city of Yerevan - Aragatsotn, Ararat, Armavir and Kotayk. As of January 1, 2029, tax refunds will no longer be applicable to other regions either. The restrictions will not affect border settlements.
