For Individual Clients

Income Tax Allowances for Mortgage Loans

Question 1: Who is eligible to enjoy the benefits of income tax refund for mortgage loans?

Answer: hired workers

2) Hired individuals whose tax settlements are handled by tax agents are eligible for income tax refund, if the tax agent has fulfilled the declared income tax liabilities in relation to salary and other equivalent payments for that quarter.

3)  Hired individuals who perform their tax settlements themselves are eligible for income tax refund, if they have fulfilled the declared income tax liabilities calculated by simplified tax procedure in relation to salary and other equivalent payments for that quarter.

Hired individuals who are borrowers or co-borrowers under mortgage loans issued after January 01, 2018 are eligible for income tax refund only once, irrespective of whether or not they have used this program before January 1, 2018.


Question 2: Does this Law apply to all developers?

Answer:

For purchase of apartment: developers having constructed or constructing residential buildings based on lawful construction permits and documentation

For purchase of private house: developers (legal entities and individual entrepreneurs) that have constructed and are selling private houses in residential districts or complexes based on lawful construction permits and documentation 

For construction of private house: owners who have received a loan to construct a private house based on lawful construction permits and documentation on a land plot they own


Question 3: What property does this Law cover?

Answer: This Law covers (i) apartments purchased directly from developer of residential buildings constructed or being constructed in Armenia; (ii) apartments purchased from the state or community under state- or community-implemented public housing construction programs; (iii) private houses purchased directly from developers (legal entities and individual entrepreneurs) in residential districts and complexes in Armenia, and (iv) private houses constructed in Armenia. 

Note that the apartment should either be in a

  • new residential building the construction of which is completed with ownership certificates delivered, or
  • residential building under construction, where the buyer acquires a right to purchase an apartment

For private houses: 

  • The borrower should use the mortgage loan to construct a private house based on legitimate construction permit on a land plot they own, or
  • The borrower should use the mortgage loan only to purchase a newly constructed private house directly from developer (legal entity or individual entrepreneur)

 


Question 4: Loans over what period are covered by this Law? 

Answer: This Law covers mortgage loans issued after January 01, 2018 and actually utilized for purchase of apartment or construction of private house meeting the requirements specified in question 3. 


Question 5: What percentage of amount is refunded?  

Answer: 

Amount is refunded to the extent of income tax withheld from salary and other equivalent payments of hired worker during each quarter, with the following restrictions:

  1. Value of purchased/constructed apartment/house should be within AMD 55 million. 
  2. Quarterly refund should not exceed AMD 1.5 million. 

Question 6: How often are refunds paid? 

Answer: Amounts are refunded to hired individuals on a quarterly basis. 


Updated 12.03.2018, 9:39

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