Interest relief on mortgage in 2020 – who is entitled and how to calculate it?

From January to the end of April there is a period in Poland for tax settlements PIT and CIT. Therefore, millions of Poles settle the tax with respect to personal income tax or corporate income tax.

They can take advantage of numerous tax optimization concessions. If they have a mortgage, they can take advantage of the interest relief once they meet the additional requirements. What is How to use it in your annual tax return?

What is the interest relief?


The catalog of tax breaks lists the tax breaks and preferences that the taxpayer can use for settlements with the tax office due to income tax. One of them is interest relief. What is this? This is a tax relief used for settlements of individuals due to annual income tax.

It gives the taxpayer entitled to such relief the deduction of interest on the granted housing or mortgage loan. This is an interest relief for people who pay off a mortgage and incur costs of interest that are the subject of a tax deduction from income or income obtained in a given tax year.

The taxpayer deducts only interest paid, not interest payable and unpaid. In addition, the deduction is limited to a certain amount.

Refinancing loan and interest relief

The interest relief is applicable to housing mortgages taken from a bank or from a cooperative savings and credit union.

Not only interest on the original loan, but also interest in refinancing loans will be deductible.

Interest relief – regulating act

The interest relief is deducted by Polish tax residents on the basis of art. 26b of the Act of July 26, 1991, on personal income tax. Therefore, for the interest relief, the legal basis is the PIT Act, but in the version binding until the end of 2006.

In the current Act on personal income tax, you can look for regulations on interest relief in vain. It is worth emphasizing that taxpayers are entitled to interest relief on the basis of rights acquired no longer than until 2027.

Terms and conditions for counting down the statutory discount


Some taxpayers who have taken out a home loan have the right to have their income or income from taxed sources reduced by the cost of interest under the interest relief. The rules for deducting such relief have been mentioned in an earlier tax act. The interest relief is granted to the taxpayer under the following conditions:

  • he must be subject to unlimited tax liability in Poland;
  • the loan or loan was granted between January 1, 2002, and December 31, 2006, by a bank or cooperative savings bank (SKO);
  • in the case of an investment relating to a building or a dwelling, the relief shall apply if the construction was completed not earlier than in 2002;
  • in the case of construction, superstructure or extension of a building for residential purposes, the relief will be due if the investment was completed before the expiry of three years from the end of the calendar year in which, in accordance with the construction law, the investor obtained the building permit or the permit for the use specified in the provisions of the construction law apartment building;
  • in the case of a contribution to a housing cooperative or the purchase of a newly built residential building or a dwelling – the discount will apply if a contract has been concluded to establish cooperative ownership or tenant’s right to a dwelling or a contract in the form of a notarial deed to establish separate ownership of the dwelling, to transfer on the taxpayer of the ownership of a residential building or dwelling, one of which will be the taxpayer entitled to the discount;
  • interest has already been paid, and the amount and date of payment have been documented in an appropriate manner – proof issued by the lender;
  • interest cannot be included in tax costs (tax-deductible costs) or reimbursed to the taxpayer in any other form unless the interest refunded has increased the tax base;
  • the taxpayer or the spouse of the taxpayer could not benefit from the income (income) or tax deduction of expenses incurred for their own housing purposes.

The condition for taking advantage of the interest relief in PIT is taking a loan by a taxpayer to meet his own housing needs. However, this taxpayer did not have to be registered in the acquired property nor did he have to live in it, but at the time of taking the loan, he should intend to live in the premises purchased for the loan.

Interestingly, the sale of the property, the purchase of which was financed with a bank loan, does not result in the loss of the right to take advantage of the relief in the following years, but the basic condition here is further repayment of the loan.

Many taxpayers are wondering not only whether they are entitled to an interest relief, but also what PIT should be submitted to the tax office in the case of this relief. Well, the deduction of the amount of interest relief is made in the annual tax returns submitted by taxpayers: PIT-37, PIT-36 or in PIT-28 and in Annex PIT / D.

What interest cannot be deducted?

What interest cannot be deducted?

It is not possible to deduct credit interest under the taxpayer’s personal tax relief if:

  • we’re not actually paid,
  • the amount and date of payment of interest are not documented by proof issued by the entity granting the loan,
  • were included in tax-deductible costs,
  • have been returned to the taxpayer in any form,
  • were deducted from revenues under the Lump-sum Act.

In addition, it is not possible to deduct, as part of the interest relief, interest on loans:

  • granted from the National Housing Fund,
  • granted by housing associations,
  • granted to remove the effects of floods,
  • covered by interest redemption from state budget funds,
  • used for the purchase of land or perpetual usufruct right to land,
  • contracted under the terms of the Act of September 8, 2006, on financial support for families in purchasing their own apartment.

Credit extortion and criminal liability

Taking an online cash loan is a complex process that does not end with completing the form online. It is also necessary to prevail to present a certificate of our earnings or conduct a telephone conversation with a consultant, and even carry out a verification transfer.

This issue looks a bit different in the case of online loans, e.g. popular payday loans, which do not require so many formalities to be granted. In most cases, you will only need your ID card, and this may already create more space for cheaters.

Credit extortion and criminal liability


What is the risk of extortion? This question cannot be answered with one sentence. Why? In Polish law, the situation of extortion of a loan or credit can be interpreted in two ways.

The fine for extorting a loan depends on whether it is classified as credit fraud or ordinary fraud. What’s more, one crime can be classified under both these acts, which means that the perpetrator will be convicted of an offense for which worse sanctions are provided.

We’ll take a closer look at the consequences of extorting a loan. In the case of credit fraud, the accused is punished by imprisonment from 3 months to 5 years. For ordinary fraud, the court may impose a prison sentence of 6 months to 8 years.

It is also possible to issue a suspended sentence for extortion, however, in this case, certain circumstances must occur, e.g. the guilty person should not be punished so far. Although the fine for extorting credit is very high, there are plenty of people trying to commit this type of crime.

What to do if you have been a victim of a phishing loan?

What to do if you have been a victim of a phishing loan?

What should I do if there was a phishing scam on my personal data? In this situation, you must act quickly, because time is to your disadvantage. If you lost your ID card and it turned out that you have been a victim of a phishing loan, you must write because the bank will appeal in which you describe what happened.

The case will be referred to court and you will receive information about the day of the trial to which you must report. At the same time, it is worth submitting a notification of a crime to the prosecutor’s office.

Unfortunately, it may take some time for your innocence to be proven, which means you will have to pay back the loan installments. Do not worry, however, after the sentence, you will get all the money back.

How to defend yourself against credit scams?


Are you wondering how to protect yourself against credit fraud? All you need to do is follow some tips.

  • Try to get in the habit of checking at least once a day if you have an ID card or other ID document with you. If you notice that it is missing, you should immediately reserve it.
  • Protect your documents while traveling, especially in crowded places, including airport or public transport.
  • Be extremely careful on the web, do not go to pages with a suspicious appearance, especially when the anti-virus recommends avoiding them. If you have to enter too much personal data in the form, a red light should light up for you.
  • Set up a secure login to your bank account via the internet, e.g. by using a code sent by SMS to take care of online transfers.
  • Use the so-called Credit Checker alerts. You can purchase this type of service at the Credit Information Bureau for USD 19 a year. It helps to defend against phishing because it notifies you by SMS of every attempt to incur a commitment to consumer data.

Where to report a phishing loan? If there is a fraud, report it to the police and the bank.

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Real estate loan buy-back: after how long?



The question is simple: after how long can you get a mortgage buyout? Here is our response.

Credit repurchase: how long on average?

Credit repurchase: how long on average?

There are no official statistics on the deadlines concerning the progress of a credit consolidation operation. Simply put, we find within banks and intermediaries in banking operations that we can obtain a repurchase of its credits as quickly as 11 days (repurchase of consumer loans without guarantee) and at most after 101 days (repurchase mortgage loan).

The presence of a guarantee is important since it significantly lengthens the time for setting up loan repurchases.

Home loan redemption: after how long then?

Home loan redemption: after how long then?

We can estimate an average delay of 30 days to obtain a buyout of a mortgage, this delay takes into account:

  • The fulfillment of the request by the client
  • Consideration of the request by the organization
  • The study of the request by the organization
  • Sending of supporting documents by the client
  • Receipt of supporting documents by the organization
  • Sending to a bank or a decision by the organization
  • The deadline for consultation on the final decision
  • Editing of the loan offer by the organization
  • Sending the loan offer to the client
  • The signing of the loan offer by the client
  • The return of the loan offer to the organization
  • The legal reflection period (14 days)
  • The period between the reimbursement of former creditors and the release of funds

The more reactive the two parties are on this journey, the shorter the delay. The point that takes the most time is the sending of the necessary supporting documents by the client, if the latter returns all the documents within 2 to 3 days, the funding will be faster.

Online simulation: save time!

Online simulation: save time!

Internet saves a lot of time in administrative procedures, in purchases or in the declaration of taxes (for example). It is the same for the repurchase of credits. Online simulation saves time in the process and avoids traveling. You just need to fill in their information and then confirm the entry, you will quickly receive your first estimates by e-mail or post as you choose.