Outstanding balance insurance and tax benefit in the Flemish Region


An outstanding balance insurance may entitle you to a tax bonus in the Flemish Region, but not always. Here is why.


The conditions to be met in order for your outstanding balance insurance to entitle you to a tax benefit in the framework of the integrated housing bonus in the Flemish Region are as follows:

  • It is an individual life insurance policy intended to reconstitute or guarantee a mortgage loan taken out as of 2016.
  • The policy is taken out with a body within the European Economic Area (EEA).
  • The policy is taken out before age 65.
  • The policy is taken out on your own life.
  • The beneficiary is the person (or people) who will acquire the full ownership or the usufruct of the dwelling.
  • If the policy also provides for a survival benefit, it must have existed for at least 10 years. The beneficiary must therefore be the policyholder and the pension capital cannot be paid before age 65.

The integrated housing bonus applies to the contracts entered into as of 1 January 2016. For loans taken out before this date, nothing changes.

Tax margin

Once these conditions have been met, there will still have to be room in your "tax basket" entitling you to deduct capital and interest repayments. If you have already reached your maximum, the premiums for your outstanding balance insurance will no longer give you a tax benefit. For 2019 (2020 tax declaration), the ceiling for the basket amounts to €1,520, with an increase possible during the first 10 years of the loan (+ €760) and if you have at least three children (+ €80).

Which tax benefit?

If there is still room in your tax basket, the premiums for your outstanding balance insurance will therefore entitle you to a tax benefit in proportion to the marginal tax rate of 40%.

Declaration not necessary

Moreover, you do not have to include your outstanding balance insurance in your tax declaration. If you are sure that your tax margin is already totally used up by the capital and interest repayments of your loan, it would be best, on the contrary, not to include your policy in your declaration. And in this case, the capital paid will not be taxed either, which could be a good thing given that taxation is based on what is referred to as the ‘fictitious rate’.

Would you like to know more about NN's outstanding balance insurance? You can read about it here.