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Written by:
Bas Hollenberg


No tax joy for exchange loss victim

The “home acquisition debt” is the sum total of debts the taxpayer has incurred in connection with the acquisition, improvement and/or maintenance of his or her (family) home. The interest and cost components are available for tax relief, to a maximum of such costs as are directly related to loans taken out, renewed or redeemed in connection with said acquisition, improvement and/or maintenance. Exchange losses suffered due to converting a home acquisition debt from one currency to another are to be left out of consideration.

The better (lower) interest rate on Swiss franc-denominated loans in 2007 encouraged a home owner to convert his home acquisition debt from euros into Swiss francs. When in 2010 he converted the loan back into its original currency, he suffered a € 127,000-plus loss due to the Swiss franc’s increased exchange rate to the euro, which loss he sought to charge to his income under the heading of “loan costs”. Sadly for him the Supreme Court of the Netherlands disallowed it.

Dutch version: Valutaverlies door omzetting geen deel eigenwoningschuld

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