Tax deductions Income Tax Deductions related to financing the construction of house (main) Based on the Income Tax Law of Aruba (Landsverordening Inkomstenbelasting), the costs directly related, or as a consequence of, the acquisition of a mortgage (hypotheek) from a financial institution (banks, FCCA, etc.) for the purchasing or construction of a new house, which will be used as your primary residence, are deductible from your taxable income for tax purposes. The following costs, amongst others, are deductible from your income tax: Appraisal report required by financial institutions to get a mortgage; Notary costs related to the placement of the mortgage; Closing fees/costs charged by financial institutions related to the issuing of the mortgage; The annual percentage rate (APR or yearly interest) charged by the financial institutions for the issuing of the mortgage; All other/related costs charged by the financial institution in connection with the mortgage. Please note that if the house in question is not your primary residence, other laws and regulations apply. These deductions will be reimbursed after the Tax Department has reviewed your yearly income tax form. Wage Tax Reductions Aruban residents, who are subject to Aruba wage taxes, could apply for wage tax reductions. As a result the tax authorities will take the paid interest into consideration for wage tax purposes. In principle, only residents who have filed their Income Tax Form for the previous year, become eligible for these monthly reductions. For those residents, to obtain the reductions, they have to do the following. Every beginning of the year, they have to file a request for reductions form (Verzoek vermindering Loonbelasting Premies volksverzekeringen ML), which can be obtained at the Tax Department. In the request, the reductions that they are seeking for that year have to be specified. They are also required to submit the supporting documents for these reductions that they are seeking. If accepted, the Tax Department will impose an assessment within 5 working days after being submitted, provided they filled the form correctly and submitted the supporting documents. This assessment need to be handed over to their employer, who in turn has to implement the reductions specified in the assessment with your wage tax due.