Interest subsidy

Homeowners may be granted interest subsidy to reduce the interest they are required to pay on their home loan.

The conditions for being granted home loan interest subsidy are that you:

• take out a loan in order to acquire a home for yourself in the Faroes,
• are the recorded borrower of the loan,
• reside on the land registration number that is tied to the loan,
• are the recorded owner at the land registration number, 
• have full tax liability in the Faroe Islands.

Only loans for purchasing, constructing or maintaining a place of residence qualify for home loan interest subsidy.

An individual can only receive interest subsidy for one property, and interest subsidy can only be granted to one individual per land registration number.

The subsidy is 35% on interest up to DKK 100,000, meaning that it cannot be more than DKK 35,000.

Loans from abroad
If your loan is not with a Faroese financial institution, you must, every January, provide TAKS with an interest estimation for the coming year. At year-end, you must then inform TAKS of the actual interest. If TAKS does not receive the estimation every January, interest subsidy cannot be granted.

Students may be granted interest subsidy to reduce the interest they are required to pay on their student loan.

The conditions for being granted student loan interest subsidy are that you:

• have full tax liability in the Faroe Islands,
• have completed your education,
• have not had the interests deducted in the country where you studied.

The subsidy is 35% of the interest on the loan.

Loans from abroad
If your student loan is not with a Faroese loan provider, you must, every January, provide TAKS with an interest estimation for the coming year. At year-end, you must then inform TAKS of the actual interest paid. If TAKS does not receive the estimation every January, interest subsidy cannot be granted. 

There are two ways to apply for interest subsidy:

1. The simplest way is to use TAKS' online portal, Borgaragluggin, where the forms are ready to be completed and submitted digitally.
2. Or you can download the application form for home loan interest subsidy or student loan interest subsidy, available on this website, and return it to TAKS.

The first time you apply for student loan interest subsidy, you must enclose the payment agreement with the loan provider and the annual statement.