Under Which Circumstances the Income Tax on Mortgage Loans Will Not Be Reimbursed: Clarifications from the State Revenue Committee

The State Revenue Committee of Armenia informs that starting from January 1, 2022, the Tax Code of Armenia has established the circumstances under which the income tax paid on the interest amounts for servicing mortgage loans by employees will not be reimbursed (Article 160, Part 2, Point 4 of the Tax Code of Armenia).

Specifically, the income tax will not be reimbursed for mortgage loans received after July 1, 2022, if the immovable property, as defined in Part 1 of Article 160 of the Tax Code of Armenia, is located, is under construction, or will be constructed in the first zone included in the evaluation area of buildings defined by the Government within the administrative area of Yerevan.

For mortgage loans received after January 1, 2023, if the immovable property is located, is under construction, or will be constructed in the second zone within the administrative area of Yerevan.

For mortgage loans received after July 1, 2023, if the immovable property is located, is under construction, or will be constructed in the third zone within the administrative area of Yerevan.

For mortgage loans received after January 1, 2025, if the immovable property is located, is under construction, or will be constructed in areas not mentioned in the above points within the administrative area of Yerevan.

At the same time, the SRC informs that it is necessary to note that these restrictions do not apply to the apartments in multi-apartment residential buildings that are built (under construction) based on construction permits granted by decisions made before January 1, 2022, as well as to the subsequent reimbursement of income tax amounts for mortgage loans obtained before the aforementioned amendment.

According to the Tax Code of Armenia, since January 1, 2018, borrowers and co-borrowers can choose to benefit from the reimbursement of income tax on the interest paid for only one mortgage loan agreement (Article 160, Part 2, Point 3).