How the Mortgage Income Tax Refund Program Works in Armenia: Terms and Changes Starting from 2025

The Mortgage Income Tax Refund Program is currently one of the most beneficial government support tools for citizens purchasing real estate in Armenia. It allows you to reclaim a significant portion of mortgage interest payments, effectively bringing your interest rate close to 0%.

In this article, we explain who is eligible, how the refund mechanism works, and what has changed since January 1, 2025.

What Is the Mortgage Income Tax Refund Program?

This is a state program launched on November 1, 2014, which allows citizens to recover the amount paid in mortgage interest through an offset against personal income tax (PIT).

If you are officially employed and pay income tax in Armenia, the government will refund the interest amount you’ve paid to the bank, up to the amount of your annual tax liability.

Who Is Eligible for the Program?

Current eligibility criteria:

1. You are a citizen of Armenia or another country planning to buy property in Armenia.
2. You are purchasing a newly built apartment from a developer or building a private home yourself.
3. For purchases in Yerevan, the construction must have started before January 1, 2022.
4. You are officially employed and pay personal income tax in Armenia.
5. You are 45 years old or younger at the time of application.
6. Starting from January 2025, the property must be located outside Yerevan. Previously, properties in the capital were also eligible.

Can Foreign Citizens Receive a Tax Refund on a Mortgage in Armenia?

Yes, foreign citizens can participate in the income tax refund program if they meet the following conditions:

1. Tax residency: You must be a tax resident of Armenia, which means residing in the country for at least 183 days within a calendar year.
2. Official employment: You must have a formal employment contract and pay income tax in Armenia.
3. Property purchase: You must purchase newly built housing that meets the program’s requirements.

Therefore, foreign nationals who are tax residents and officially employed in Armenia may benefit from the mortgage income tax refund program, as long as their property meets the criteria.

How Does the Income Tax Refund Mechanism Work?

1. You take out a mortgage loan from any bank, under any program.
2. You begin paying interest on the loan and paying income tax simultaneously.
3. The government reimburses the interest payments you make — up to the amount of income tax you paid — on a quarterly basis.
4. The refund continues as long as you pay both mortgage interest and income tax in Armenia.

Example 1:

If you paid AMD 1,200,000 in income tax over the year and your annual mortgage interest was AMD 1,000,000, you would receive the full AMD 1,000,000 back.

Example 2:

If you paid AMD 700,000 in income tax and your mortgage interest was AMD 1,000,000, you would only get AMD 700,000 refunded.

The remaining AMD 300,000 is not compensated and does not carry over to the next year.

The government does not refund the full amount of mortgage interest — it only refunds up to the total amount of income tax you paid for the year.

The refund is strictly limited to the amount of tax paid.

Program Terms

Bank Requirements for Down Payment

Most banks in Armenia require a down payment ranging from 10% to 30% of the property’s value. For example:

1. ACBA Bank, Ardshinbank, Ameriabank — minimum down payment typically 10–15%
2. Inecobank, AraratBank — depending on income and type of property, the down payment may reach up to 30%

In some cases, especially under government programs, banks may offer preferential terms, such as reduced or deferred down payments.

However, not everyone is able to save up such an amount immediately — this is especially true for young families or first-time homebuyers. In such cases, there are alternative solutions available.

What If You Don’t Have Enough for a Down Payment?

If you don’t have the required amount for a down payment, the following options may help:

1. Collateral in the form of other property — if you or your relatives own another apartment or commercial property, it can be used as security for the loan.
2. Adding a co-borrower — this increases the family’s total solvency and can positively affect loan terms.
3. Installment plan or subsidy from the developer — some developers offer to split the down payment into parts or cover part of it through agreements with partner banks.
4. Support programs — youth, family, and regional support programs often provide more favorable conditions.

Who Are Co-Borrowers and Why Is It Beneficial?

Co-borrowers are individuals who share legal responsibility with the main borrower for loan repayment. In most cases, this is a spouse, but it may also be another close relative.

Benefits of co-borrowers:

1. Improve the overall creditworthiness of the family
2. May help you qualify for a larger loan or better terms (e.g., lower rate or smaller down payment)
3. Share legal responsibility for the mortgage

What Changed on January 1, 2025?

According to a government decision, starting January 1, 2025, the program no longer applies to the purchase of newly built apartments in Yerevan.

What does this mean?

1. If you signed the purchase agreement before December 31, 2024, you retain the right to receive income tax refunds for the full term of the mortgage.
2. If you sign the agreement after January 1, 2025:
3. When purchasing housing in Yerevan — no tax refund will be available.
4. When purchasing housing in regions or in buildings where construction began before 2022 — the program will still apply.

What Is the Main Benefit of the Program?

1. You pay less interest to the bank (depending on how much income tax you pay).
2. The longer the loan term (e.g. 15–20 years), the greater the benefit.
3. You can save hundreds of thousands of drams each year — and use that money for renovations, furniture, or early loan repayment.

Example:

Let’s say you take out a mortgage for AMD 25 million, with a 20% down payment (AMD 6.25 million), at an 8% annual interest rate over 20 years.

In this case, you pay the bank around AMD 2 million per year in interest.

If your annual gross income is AMD 4.8 million (about AMD 320,000 net per month), your annual income tax would be AMD 960,000 — and you would receive the full AMD 960,000 back every year.

This effectively reduces your interest rate close to 0%.

How to Use the Program?

1. Check your eligibility: under 45 years old, buying newly built housing, construction started before 2022 (or property outside Yerevan).
2. Apply for a mortgage at a bank.
3. Use the AFM platform, section “Mortgage”, to compare all offers in Armenia — it’s fast and easy to find the most favorable terms.
4. Submit your application to the Tax Service along with copies of your mortgage agreement and required documents.
5. Receive your refund quarterly — directly to your card.

How Many Families Have Used the Program?

According to Armenia’s Ministry of Finance, more than 38,000 families have used the program since its launch in 2014.

Preliminary estimates show that the average annual refund ranges from AMD 500,000 to AMD 1.2 million, depending on the borrower’s income.

Tips for Those Planning to Take Out a Mortgage

1. If you're considering buying in the regions, the program remains active after 2025.
2. Analyze long-term real estate trends. Study forecasts on property prices and rental rates — this will help you assess whether it’s a smart time to buy.
3. Don’t focus only on the purchase price — consider the potential tax refund on interest, which can save you up to 30–40% of the total loan cost over time.
4. Plan your budget with future income changes in mind. For long-term mortgages, it's important to prepare for potential increases or decreases in income to avoid financial stress later.
5. Explore early repayment options. This can significantly reduce overpayment on interest, especially if your loan allows extra payments without penalties.

Want more ways to save on interest rates? Check out our article for additional tips.

Conclusion

The mortgage income tax refund program in Armenia is a powerful tool to reduce your financial burden when purchasing a home. It is compatible with all government support programs, including the energy-efficient renovation program.

Thanks to the interest reimbursement mechanism, you may end up paying little to no interest at all, which is especially beneficial for long-term loans.

The program is available to citizens purchasing new housing and meeting certain conditions — including being under 45 years old.

Important change: Since January 1, 2025, the program no longer applies to new builds in Yerevan — unless construction started before 2022. In this case, or when buying property in regional areas, the benefit still applies.

If you're struggling with the down payment, there are alternative solutions — such as using other property as collateral or adding co-borrowers, which can improve your chances of loan approval.

One of the program's key advantages is that it’s compatible with other support programs, which means even more savings. Plus, you can use it with any bank in Armenia.

If you want to buy an apartment in Yerevan, check out our step-by-step guide.

Share this information with your friends and loved ones — someone close to you may need this opportunity right now.

Use AFM to find the most affordable mortgage — get personalized recommendations and take your next step toward owning a home without overpaying!