Mortgage interest tax deduction is actually the same as five insurances and one gold, which is deducted in advance when calculating individual tax. In the future, the calculation method of individual tax will be one more than the current calculation method, MINUS the special deduction fee. At present, the threshold of individual tax in China is 3500 yuan, and those who earn more than 3500 yuan are obliged to pay individual tax. The calculation method of individual tax will become: tax payable = salary-five insurances and one gold-mortgage interest and other special deductions, tax payable = taxable income * tax rate-quick deduction.

There are four most likely changes after the implementation of the policy:

1, the number of people who repay in advance will decrease;

2. There are more and more people with low down payment;

3. More and more people will buy high-end houses;

4. Stimulate the increase in demand for home purchases.

The most direct benefit is that if the mortgage interest can be deducted from the tax, then the buyers can get more income every month, which can reduce the mortgage pressure. But at the same time, some people think that this proposal tends to the group with high income and high mortgage, which will stimulate them to borrow money to buy a house. It is worth considering that the reform of personal income tax is a long-term direction, and controlling housing prices can not be solved by personal income tax alone.

To sum up, the mortgage interest tax credit refers to the interest expense of the mortgage loan of the purchaser, which can be used as pre-tax deduction. Generally speaking, when calculating the monthly personal income tax payable, mortgage interest is deducted from the income tax payable such as wages and salaries, and the rest is calculated as a tax.

Legal basis:

Article 14 of the Interim Measures for Special Additional Deduction of Individual Income Tax

It is stipulated that if taxpayers or their spouses use individual housing loans from commercial banks or housing accumulation funds alone or jointly to buy houses for themselves or their spouses in China, the interest expenses incurred from the first housing loan shall be deducted according to the standard quota of 1 000 yuan per month in the year when the loan interest actually occurs, and the maximum deduction period shall not exceed 240 months. Taxpayers can only enjoy a first home loan interest deduction.