Mortgage Income Tax Refund Rules in Armenia (2026 Guide)

If you have a mortgage in Armenia, you may be entitled to get a portion of your income tax back every year. The mortgage income tax refund -- formally known as the income tax deduction on mortgage interest -- is a government program that allows homeowners to reclaim part of the income tax they have paid, based on the interest portion of their mortgage payments. In practical terms, this means the government reimburses you for a share of your mortgage interest costs, which can add up to hundreds of thousands of drams annually and meaningfully reduce the overall cost of homeownership.

For anyone buying a new apartment or home with a mortgage, understanding this refund is essential. It is one of the most tangible financial benefits available to homebuyers in Armenia, yet many borrowers either do not know it exists or are unsure how to take advantage of it. The refund can offset a significant chunk of your annual mortgage expense -- particularly in the early years of your loan when interest payments are at their highest. Whether you are a first-time buyer exploring your options or a current mortgage holder who has never applied, this benefit is worth your attention.

That said, the rules around this refund have changed considerably in recent years. Most notably, a regional phase-out is underway: properties in Yerevan are now subject to different limits than those in Armenia's regions, and the benefit for Yerevan properties is being gradually reduced. This guide covers everything you need to know for 2026 -- who is eligible, how the refund is calculated, the step-by-step application process, regional differences, and practical tips to make sure you receive the maximum amount you are entitled to.

Who Is Eligible for the Mortgage Income Tax Refund?

Not everyone with a home loan in Armenia can claim the mortgage income tax refund. The program is designed specifically for employed individuals who pay income tax and hold a qualifying mortgage. Before you start gathering documents, make sure you meet all of the following criteria.

To be eligible for the mortgage interest income tax refund in Armenia, you must meet all of these conditions:

• You must be a hired employee paying income tax on salary or equivalent employment payments. Self-employment or freelance income alone does not qualify. Someone who is both self-employed and a hired employee may qualify only through eligible salary income tax.
• The mortgage must be issued by a licensed Armenian bank or credit organization. Loans from private lenders, foreign banks, or unlicensed entities are not eligible.
• The loan must be specifically classified as a mortgage loan. Consumer loans, personal credit lines, or other credit products — even if used to purchase property — do not qualify.
• The property must be residential. Commercial real estate, land-only purchases, and mixed-use properties used primarily for business purposes are excluded.
• The property must be located in Armenia. Mortgages on properties abroad are not covered by this refund program.
• The borrower whose name is on the mortgage is the one who claims the refund. If the mortgage is in your spouse's name, they are the eligible claimant — not you.
• Ordinary resale homes do not qualify. Article 160 of the Tax Code covers an apartment bought directly from the developer, a home obtained from the State or a community under a housing program, an individual house bought directly from a qualifying developer, or construction of your own individual house. A purchase from a previous private owner is outside this benefit.

It is worth noting that the refund amount is limited by how much eligible salary income tax was calculated and paid for the quarter. Even if your mortgage interest payments are high, you cannot receive a refund greater than the eligible salary income tax for that period. We will cover the exact calculation and limits in the next section.

Quarterly Refund Cap

The income tax refund on mortgage interest is not unlimited — it is subject to a quarterly cap based on when the mortgage loan was received.

Mortgages in the 2025-or-Later Cap Category

For qualifying mortgage loans received in 2025 or later, the combined refund to the borrower and any co-borrowers is capped at 750,000 AMD per quarter. This means:

• Your refund is still limited by both the eligible salary income tax and the qualifying mortgage interest paid for that quarter.
• Even if both amounts exceed 750,000 AMD, the borrower and co-borrowers cannot receive more than 750,000 AMD in total for that quarter.

This is a quarterly, not annual, ceiling. If the refund independently reaches the ceiling in all four quarters, the theoretical annual total is up to 3,000,000 AMD (4 x 750,000 AMD).

Earlier Qualifying Mortgages

For qualifying mortgages in the 2018–2024 cap category, the combined borrower and co-borrower cap is 1,500,000 AMD per quarter.

Quick Example

Say your eligible salary income tax in Q1 2026 is 200,000 AMD, while both the qualifying interest paid and the cap are higher. You get the full 200,000 AMD back as a refund.

Now say in Q2 both your eligible salary income tax and qualifying interest paid are 900,000 AMD. You receive only 750,000 AMD because the quarterly cap applies.

The cap is applied independently each quarter, so an unused portion from one quarter does not carry over to the next.

Regional Phase-Out Timeline

One of the most important changes to the mortgage income tax refund program is its gradual phase-out across Armenia's regions. The government has introduced a staggered timeline that eliminates the refund for new mortgages, starting with the capital and expanding outward over several years. If you are considering buying property, the timing of your mortgage matters just as much as its location.

How the Phase-Out Works

The phase-out applies based on when the mortgage was received, not when you apply. A mortgage within the geographic window can continue to qualify subject to every other rule. In Yerevan, check the valuation zone rather than relying on one citywide date; a transition exception may apply when the project's construction permit was issued before January 1, 2022.

Phase-Out Schedule by Region

What This Means in Practice

• Yerevan buyers: If your mortgage was issued before the applicable Yerevan cutoff, you may still claim the refund if every other Article 160 requirement is met. Later mortgages are geographically excluded, subject to the applicable statutory transition exceptions.
• Phase 2 regions (Aragatsotn, Ararat, Armavir, Kotayk): An otherwise qualifying mortgage received by the end of 2026 remains within the geographic window. Mortgages received after January 1, 2027 are geographically excluded, except for qualifying property in designated border settlements.
• Phase 3 regions (Shirak, Lori, Tavush, Gegharkunik, Vayots Dzor, Syunik): Otherwise qualifying mortgages remain within the geographic window until the 2029 cutoff, with the designated-border-settlement exception.

Why Is the Government Phasing It Out?

The phase-out reflects a deliberate policy shift. The mortgage income tax refund was originally introduced to stimulate homeownership and support the housing market across the country. Over time, as Yerevan's real estate market matured and property demand grew strongly on its own, the government determined that the capital no longer needed this incentive. By ending the program in Yerevan first and keeping it active longer in more remote regions, the policy aims to redirect homebuying incentives toward Armenia's regions -- encouraging development and population retention outside the capital.

The staggered approach also gives buyers and the market time to adjust. Phase 2 regions, which are geographically close to Yerevan and have relatively active markets, lose eligibility next. The most distant regions -- where housing demand is lower and the incentive arguably has the greatest impact -- retain the benefit the longest.

Key Takeaway

If you are planning to buy property with a mortgage, check where your property falls on this timeline. For Phase 2 regions, the window is closing soon. Acting before the regional cutoff preserves only geographic eligibility; the employee, property, acquisition-route, value, lender, and one-contract requirements must also be met.

Border Settlement Exception

Properties located in officially designated border settlements may continue to qualify for the mortgage income tax refund regardless of the regional phase-out timeline. This exception is designed to encourage settlement and development in strategically important border areas of Armenia. It changes only the geographic cutoff: the acquisition must still meet Article 160, so an ordinary resale purchase does not become eligible merely because it is in a border settlement.

It is important to note that "border settlement" is a legal designation maintained by the Armenian government — not every town or village near a border automatically qualifies. Only properties in settlements that appear on the official government list are eligible for this exception. Buyers should verify whether their specific settlement holds this designation before relying on the continued refund eligibility.

The official list of border settlements can be verified through local municipal authorities or directly through the Armenian government. If you are considering purchasing property in a border area, confirming the settlement's status early in the process will help you understand whether the income tax refund will apply to your mortgage.

How the Refund Is Calculated

Understanding the actual math behind the refund helps you estimate how much you will get back each quarter — and why that amount changes over the life of your mortgage.

The Core Formula

The general salary income-tax rate is 20%, subject to statutory exceptions. That rate determines the salary income tax calculated on taxable income; it is not applied again to mortgage interest. Article 160 refunds eligible salary income tax up to the qualifying mortgage interest actually paid. The example below assumes the general 20% rate applies.

For each quarter, use this formula:

Refundable amount = the lowest of (1) eligible salary income tax for the quarter, (2) qualifying mortgage interest paid for the quarter, and (3) the applicable quarterly cap

The borrower and any co-borrowers share the applicable cap. The 20% rate is used only to calculate salary income tax, not to reduce the interest amount to 20%.

Step-by-Step Example

Let's walk through a concrete scenario.

Given:

• Monthly gross salary: 500,000 AMD
• Monthly mortgage interest payment: 150,000 AMD
• Income tax rate: 20%

Step 1 — Calculate eligible salary income tax for the quarter:

500,000 AMD x 20% x 3 months = 300,000 AMD

Step 2 — Calculate quarterly mortgage interest:

150,000 AMD x 3 months = 450,000 AMD

Step 3 — Compare all three limits:

• Eligible salary income tax: 300,000 AMD
• Qualifying mortgage interest: 450,000 AMD
• Quarterly cap: 750,000 AMD

The lowest amount is 300,000 AMD, so that is the quarterly refund. It is not 90,000 AMD; the 20% tax rate is not multiplied by the interest payment.

Step 4 — Estimate the annual refund if all four quarters are identical:

300,000 AMD x 4 quarters = 1,200,000 AMD per year

In this scenario, you get back 1,200,000 AMD annually from eligible salary income tax already calculated and paid.

Why the Refund Decreases Over Time

Every mortgage payment you make consists of two parts: interest and principal. In the early years of your mortgage, a larger share of each payment goes toward interest. As you pay down the loan, the interest portion shrinks and the principal portion grows.

Because qualifying mortgage interest is one of the three limits, your refundable amount may decrease as the mortgage matures once the interest amount becomes the lowest limit. In year one, your monthly interest might be 150,000 AMD. By year ten, it could drop to 60,000 AMD or less — and your quarterly refund may drop accordingly.

This is normal amortization behavior, not a policy change. It simply means the refund is most valuable in the early years of your mortgage, when interest payments are at their highest.

How to Apply for the Refund

The application has two stages, and neither is filed by your employer:

1. Confirm eligibility once. Submit the official application and supporting documents to the State Revenue Committee (SRC) in person or by post.
2. Claim each quarter online. After approval, submit a separate application for every quarter through the Personal Accounts Information Portal.

Your employer reports and pays salary income tax, while the lender sends eligible paid-interest data to the SRC through ACRA Credit Reporting. You submit the quarterly request yourself. If the original documents have not changed, later quarterly claims do not require a new paper packet or a newly uploaded bank-interest statement.

For the complete current workflow, forms and troubleshooting, use our 2026 application guide.

Required Documents

Before applying for the mortgage income tax refund, gather the following documents. Having everything ready in advance will save you time and prevent delays in processing your claim.

• Mortgage loan agreement. The original contract (or a notarized copy) between you and your bank confirming that the loan is classified as a mortgage. Obtain this from the bank that issued your mortgage.

• Qualifying acquisition or construction contract. This should document a direct purchase from the developer, a qualifying State or community housing-program purchase, or the construction of your individual house. An ordinary sale-purchase agreement with a private resale owner does not qualify.

• Cadastre registration certificate. This proves that the property is legally registered under your name. Issued by the State Committee of the Real Estate Cadastre (Kadastri Komite) after your purchase is registered. If you have not yet received it, visit your nearest cadastre office or apply through their online portal.

• Repayment schedule and lender data consent. Include the repayment schedule in the initial package and confirm that your lender can transmit eligible paid-interest data electronically through ACRA. You do not upload a new interest statement with every quarterly application.

• Salary-tax data. The portal uses salary income-tax calculations filed and paid by the employer. If that data is missing, ask the employer to correct or complete its filing rather than uploading a substitute statement.

• Initial application form. Use the SRC form that confirms the right to receive the refund. After approval, the quarterly request is a different electronic form submitted through the Personal Accounts portal.

• Passport or Armenian ID. A valid government-issued identification document.

Additional Documents for New Construction

If you purchased an apartment in a new development that was not yet completed at the time of purchase, you may also need:

• Developer agreement. The contract with the construction company or developer confirming your purchase of a unit in the project.

• Construction completion certificate (Act of Acceptance). Issued once the building is officially completed and handed over. This document confirms the property is ready for occupancy and may be required by the tax authority before processing your refund. Obtain it from your developer after the building receives its final state inspection approval.

Keep the initial documents and report relevant changes to the SRC. Before each quarterly application, check that both the employer's paid-tax data and the lender's ACRA interest data appear in the portal.

Practical Examples

In each example below, assume the employee, lender, property value, qualifying acquisition route, and all other Article 160 requirements are met.

Aram received a mortgage in November 2024 for a Yerevan property outside valuation zones 1–3. Because it was received before the cutoff for the remaining zones, he may continue claiming, subject to all other conditions.

Lilit receives a mortgage in Yerevan in March 2025. Assuming no statutory transition exception applies, the Yerevan geographic restriction prevents a refund for this mortgage.

Hayk buys an apartment directly from a qualifying developer in Kotayk with a mortgage received in June 2026. Because this is within Kotayk's geographic window, he may claim the refund subject to the other assumed conditions.

Ani buys a new-construction apartment directly from a qualifying developer in a designated border settlement in 2028. The border-settlement exception preserves geographic eligibility, subject to every other Article 160 condition and the applicable quarterly cap.

Common Mistakes to Avoid

Even when you qualify for the mortgage income tax refund, small oversights can delay or eliminate your benefit. Here are the most frequent mistakes borrowers make — and how to steer clear of them.

1. Assuming a missed quarter is automatically lost

The SRC guidance does not set a final filing deadline for the initial eligibility package or the quarterly application. A quarter is not automatically forfeited merely because you did not apply immediately after it ended, but every quarter must still be selected and claimed separately.

Tip: Apply after the employer's paid-tax data and the lender's ACRA interest data are visible in the portal.

2. Not Verifying Regional Eligibility

The cutoffs vary by region and, in Yerevan, by valuation zone. A loan after the applicable zone cutoff is geographically excluded unless a statutory transition exception applies; other regions follow the later phase-out schedule.

Tip: Before signing a mortgage agreement, confirm the purchase date cutoff for your property's region. Refer to the eligibility table in this guide or consult the State Revenue Committee directly.

3. Confusing the Refund Cap with Total Mortgage Interest

The 750,000 AMD quarterly cap applies to the combined refund paid to the borrower and co-borrowers — not to the mortgage interest itself. Paying 2,000,000 AMD in interest during a quarter does not mean you automatically receive 750,000 AMD. The refund is the lowest of eligible salary income tax, qualifying interest paid, and the applicable quarterly ceiling.

Tip: Calculate each quarter separately. If your eligible salary income tax or qualifying interest for that quarter is below 750,000 AMD, the refund is limited to that lower amount.

4. Not checking the portal's source data

A quarterly request can be delayed when the employer has not filed and paid the relevant salary tax or the lender has not transmitted eligible interest through ACRA.

Tip: Check both data sources in the portal and contact the employer or lender if either is missing; do not upload substitute statements unless the SRC specifically requests them.

5. Assuming Consumer Loans or Renovation Loans Qualify

An eligible mortgage loan is necessary but not sufficient: the acquisition or construction route must also satisfy Article 160. Consumer loans, renovation loans, or general-purpose loans secured by real estate do not qualify — even if the money was used to buy a home.

Tip: Confirm both that the bank agreement is a qualifying mortgage and that the direct-developer, State/community program, or self-construction route meets Article 160.

6. Not Checking Border Settlement Status

Properties in officially designated border settlements may retain geographic eligibility longer. This exception does not increase the applicable refund cap or make an ordinary resale purchase eligible. Only settlements on the government's official list receive the geographic exception.

Tip: If your property is in a border area, check the official list of border settlements published by the government before counting on the extended benefits. Your local community office or the State Revenue Committee can confirm whether your address qualifies.

Frequently Asked Questions

Can I claim the refund if I refinanced my mortgage?

Generally yes. As long as the new loan is also a mortgage secured by residential property and the original eligibility conditions are still met, refinancing does not disqualify you. Make sure the refinanced loan is with a licensed Armenian bank or credit organization, and keep documentation from both the original and refinanced loans.

What if I have two mortgages?

You may hold more than one mortgage, but each natural person acting as a borrower or co-borrower may use this refund for only one chosen mortgage contract. Prior use as a co-borrower counts, so you cannot later claim the benefit for another mortgage.

Does the refund apply to new construction purchases?

Yes, when the apartment or individual house is acquired directly through one of Article 160's qualifying routes. An ordinary resale purchase from a previous private owner does not qualify. State or community housing-program purchases and construction of your own individual house may also qualify when the other requirements are met.

What happens if I sell the property?

The refund stops from the quarter following the sale. Since you no longer carry the mortgage obligation on that property, there is no qualifying interest payment to claim against. If you sell mid-quarter, you may still claim for the quarter in which the sale occurred, based on the interest actually paid during that period.

Can non-residents of Armenia claim?

Generally, no. The refund is designed for individuals who pay income tax in Armenia. You need to be employed and taxed in Armenia to have income tax from which a refund can be calculated. If you work abroad and do not pay Armenian income tax, you would not have a tax base to claim against.

What if I'm self-employed?

Self-employment alone does not qualify. Article 160 applies to a hired employee and refunds income tax calculated on salary and equivalent employment payments. If you are both self-employed and a hired employee, only your eligible salary income tax can support the refund; tax paid on business income does not.

Helpful Tools

Estimating your mortgage costs and potential refund before applying can help you plan your finances. Here are two tools on our platform that can help:

• Mortgage Calculator --- Enter your loan amount, interest rate, and term to see estimated monthly payments and total interest over the life of the loan. This helps you understand how much interest you will pay each year, which is the basis for your refund calculation.

• Income Tax Refund Calculator --- Use this tool for an initial estimate, then confirm eligibility and statutory limits before relying on the result.

Important Note

Last reviewed July 29, 2026. This page is informational only and does not replace legal or tax advice. Verify current requirements in Article 160 of the Tax Code, Government Decision No. 1321-N and the SRC forms page before making financial decisions.