Understand Deductions

What is deduction for loans with 3 borrowers

deducting loans 3 borrowers

What is deduction for loans with 3 borrowers?

The deduction for loans with 3 or more borrowers is a rather unknown deduction. This applies if you have taken out a loan at, for example, a bank where you are 3 or more who are listed as borrowers. Meaning that all people are liable for the loan.

This is one of the deductions for the cost of banks and loan providers that are not automatically reported, such as the deduction of guarantee commissions or the deduction for 2-year loans. We'll guide you through it in this article.

In this article, we will cover:
  • What deductions for 3 or more borrowers are
  • Other conditions you will need to be aware of
  • Whether you are eligible to receive any deductions

What is deduction for 3 or more borrowers

When you take up a loan, e.g. a bank loan either alone or with a partner, then all the rapporting to SKAT happens automatically. But in the case where there are e.g. 3 people going to the bank to get a loan, it isn't automatically reported to SKAT.

Hence, it is one of the few bank loans, where it's not rapported automatically. It could be due to lack of IT infrastructure or too few cases of this type. But in any case, you can get a deduction for this on the same terms as all other bank loans.

The deduction itself is the interest paid. Here it is important to simply indicate one's own share of interest. For example, if you have to pay one-third of the loan, you pay one-third of the interest, and then it is this interest that you can get deductions for.

What else do you need to be aware of?

There are some other elements to be aware of with this deduction:
  • You can only deduct the interest you have paid during the year
  • You must have documentation on the loan

Check to see if you are eligible for any deductions

Deductions for loans with 3 or more borrowers is a hidden bonus that people are not aware that they can get.

That's why we in Tax Helper have created an easy and intuitive platform where you can easily see if you can get the deduction and get all the way across the finish line of reporting your deduction to SKAT. It is free to try out, and you only pay if you get a tax refund.