In the event you purchased a home in 2014 then a 2014 preliminary mortgage refund most likely has been created by your tax advisor. In this refund is taken into account the purchase costs and mortgage interest. Does it need to be updated for 2015?
Yes it does. The 2014 mortgage refund is automatically converted for the same amounts by the tax office into a 2015 mortgage refund. However, in 2015 you do not have purchase costs, that already implies the converted 2015 preliminary refund cannot be correct. Moreover, this year you have the house for the full year, hence a full year WOZ value added to your income and the mortgage is paid for a full year, hence a full year deduction.
In other words, you need to update the 2015 mortgage refund if you purchased a house in 2014. Orange Tax Services will be doing this automatically for their clients.
2015 mortgage refund update
If you have not purchased a home in 2014, but your 2013 tax return resulted in an amount of income tax to be paid back due to a too large 2013 preliminary refund. And you have not updated your 2014 mortgage refund. Then you will also need to pay back income tax for 2014. To solve this situation you can decide to update the 2015 preliminary refund, to prevent paying back income tax. We will be glad to assist.
A common made misunderstanding about the preliminary mortgage relief is the following. Due to the fact that the tax refund is already paid into account of the tax payer every month, the tax payer does not see the necessity to file the income tax return. He or she already received the refund.
If you receive a preliminary refund you always need to file an income tax return, no exceptions. The reason is simple. The tax office trusted that the preliminary refund is correct, trust is good, checking is better, hence the tax office demands to be able to check if the refund was indeed correct. That is done in the filing of the income tax return where the preliminary refund is balanced with the actual amount. That can imply an additional refund or tax to be paid back.
If the tax payer decides not to file a tax return, then the tax office will claim back all the money they paid to you in the concerning year. Moreover, active monthly mortgage reliefs are immediately terminated and also those amounts need to be paid back. Furthermore, a penalty for not filing the income tax return will be issued. This first penalty is EUR 226, the second penalty is EUR 948 and the thirds will be even higher. All done by the tax office to encourage you to file the income tax return. We will be glad to assist.