Mortgage loan

In accordance with subparagraph 4 of paragraph 1 of Article 342 of the Code of the Republic of Kazakhstan dated December 25, 2017 "On taxes and other obligatory payments to the budget" (Tax Code), in force as amended by Article 33 of the Law of the Republic of Kazakhstan "On the implementation of the Code of the Republic of Kazakhstan "On Taxes and Other Mandatory Payments to the Budget" (hereinafter - the Law on Introduction) provides that an individual has the right to apply other tax deductions, including a tax deduction for remuneration.

Clause 1 of Article 349 of the Tax Code, as amended by Article 33 of the Law on the Introduction, establishes that the tax deduction on remuneration is applied by an individual resident of the Republic of Kazakhstan on expenses for payment of remuneration on mortgage loans received from housing construction savings banks for carrying out measures to improve housing conditions on the territory of the Republic of Kazakhstan in accordance with the legislation of the Republic of Kazakhstan on housing construction savings made in their favor.

According to paragraph 1 of Article 343 of the Tax Code, as amended by Article 33 of the Law on the Introduction, tax deductions, with the exception of a tax deduction in the form of mandatory pension contributions, are applied by a tax agent at the source of payment on the basis of:

1) statements of an individual on the application of tax deductions;

2) copies of supporting documents. Such copies are kept by the tax agent during the limitation period established by paragraph 2 of Article 48 of the Tax Code.

Clause 2 of Article 349 of the Tax Code, as amended by Article 33 of the Law on the Introduction, establishes that the supporting documents for the application of the tax deduction on remuneration are:

1) an agreement of a mortgage housing loan with a housing construction savings bank for carrying out measures to improve housing conditions in the territory of the Republic of Kazakhstan in accordance with the legislation of the Republic of Kazakhstan on housing construction savings;

2) a schedule of repayment of a housing mortgage loan with the allocation of the amount of remuneration;

3) a document confirming the repayment of interest on such a loan.

According to clause 3 of Article 349 of the Tax Code, as amended by Article 33 of the Law on the Introduction, tax deductions are applied in the tax period in which the latest of the following dates falls:

the date of redemption of interest according to the repayment schedule of the housing mortgage loan;

date of payment of remuneration.

Thus, an individual who has received a mortgage housing loan from a legal entity that has the official status of a housing construction savings bank has the right to apply the tax deduction for the IIT in the form of the amount of interest on the loan.

Co-borrowers, as well as mortgage loans received from other banks and organizations carrying out certain types of banking operations, are not covered by this provision.

Housing, intermediate housing and preliminary housing loans obtained from the Housing Construction Savings Bank will be classified as housing mortgage loans, provided that such loans are secured by real estate collateral, respectively, the individual is entitled to apply this tax deduction.