ArmInfo.In 2025, approximately 97 billion drams ($252 million) will be required for income tax refunds to mortgage holders. This was announced by State Revenue Committee (SRC) Chairman Eduard Hakobyan at a government meeting, during which an additional 12.6 billion drams (approximately $33 million) was allocated for the program, in addition to the initially planned 84 billion drams ($218 million).
He recalled that restrictions on the income tax refund program for mortgage interest payments on real estate located and under construction within the administrative territory of Yerevan came into effect on January 1, 2025. This led to a sharp increase in the number of borrowers (co-borrowers) in the final months of 2024, leading to a higher-than-expected increase in repayment amounts, necessitating the allocation of additional funds in the fourth quarter of the 2025 state budget for the repayment process (the number of beneficiaries who took advantage of the program in 2024 was 49,973, while for January-August 2025, it was already 61,954).
Meanwhile, the 2025 budget allocated AMD 84 billion 070 million for the mortgage interest reimbursement process, of which AMD 16 billion 035 million was allocated in the fourth quarter of 2025. At the same time, the sharp increase in the number of beneficiaries also led to an insufficiency of funds allocated for the 2nd and 3rd quarters of 2025. Therefore, government decisions were made to carry out inter-quarter redistributions, as a result of which only about 13.4 billion drams remained to organize the process of returning interest on mortgage loans in the 4th quarter of 2025.
For January-August 2025, 69.8 billion drams have already been repaid (more than for the entire 2024, which was 69 billion drams), including 21.4 billion drams in the first quarter, approximately 24 billion drams in the second quarter, and 24.4 billion drams in July-August. Furthermore, 25.3 billion drams are projected to be repaid in the third quarter of 2025, as, according to data available in the tax authority's database, there are a number of borrowers (co-borrowers) who applied and took advantage of the compensation process in previous quarters but have not yet applied in the current quarter of 2025.
During July-August 2025, the average refund amount per borrower (co-borrower) was 412,877 drams. This means that an additional 12.6 billion drams are needed to properly complete the process by the end of 2025.
As a reminder, the program has been in effect since November 2014: citizens who purchase housing on the primary market with a mortgage (apartments in new buildings or new private homes) receive an income tax refund equal to the mortgage interest.
While 273 million drams were allocated for income tax refunds in 2015, in 2022 the number of beneficiaries reached 29,199, and the refunded amount was 36.5 billion drams. In 2023, 38,911 beneficiaries of the program received 51.9 billion drams in refunds. Overall, 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. In 2024, this figure was 68.6 billion drams.
The gradual abolition of the income tax refund system for mortgage loans began in Yerevan on July 1, 2022. The process began in the center of the capital and will be completed by 2025. In early 2024, the Armenian government proposed reducing the maximum income tax refund amount to mortgage holders from the current 1.5 million drams (per quarter) to no more than 750,000 drams per transaction, effective January 1, 2025. Furthermore, the Armenian authorities plan to completely abolish the income tax refund for mortgage loans starting in 2029. The abolition will be gradual. Thus, after January 1, 2027, income tax on mortgage loans in the primary market will not be refunded if the property is located in the regions adjacent to Yerevan-Aragatsotn, Ararat, Armavir, and Kotayk. Starting January 1, 2029, tax refunds will also no longer apply to other regions. These restrictions will not apply to border settlements.
