The mortgage interest deduction in the Netherlands is a tax deduction. The paid interest can be deducted from your income, thereby reducing the amount of income tax owed because tax is paid on a lower income. This deduction thus provides a tax advantage for those who own their own home. The interest on a debt incurred for the purchase of a home may be deducted from your income in box 1. In essence, this means that less tax needs to be paid. The higher the debt, and thus the amount of interest paid, the greater the tax advantage.