Smart Strategies to Maximize Benefits from Housing Savings for Young People in 2023

When the state budget for 2023 was presented last year, it became clear that the tax deduction for BSU was to be halved. Now the last opportunity to top up the account and thus take advantage of the tax benefits is approaching, but is it still as smart when you only get a tax deduction of NOK 2,750?

Facts about Housing savings for young people

Boligsparing for ungdom (BSU) gives young people under the age of 34 the opportunity to save up to NOK 27,500 a year. They receive a 10 per cent tax deduction for the savings amount from the income year 2023.

To make full use of this year’s tax benefit, you must earn over NOK 80,700 and deposit NOK 27,500 into the BSU account, preferably as early in the year as possible.

The limit for savings is NOK 300,000, which must be used to buy a home or pay off a debt on a home.

It will take at least 12 years to save the maximum savings amount.

It is possible to deposit and withdraw the current year’s savings amount from the BSU account as many times as you wish, but at the end of the year the amount is locked.

The change in the rules for the scheme Boligsparing for unge (BSU) means that from this year onwards you will receive a 10 instead of 20 per cent tax deduction. That is, if you save the maximum amount possible, 27,500 a year.

Instead of a deduction of NOK 5,500, it is reduced to NOK 2,750 instead. Nevertheless, the experts are clear in their speech.

– It is still a great opportunity for those who want to enter the housing market, says Derya Incedursun, consumer economist at Nordea.

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– Highly recommended

Incedursun reminds us that even after the reduction, there is still a 10 percent tax deduction.

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– You can still save the same amount per year. In addition, you have the deposit interest that you get at BSU. It is around 6.5 per cent on the savings amount in addition to a 10 per cent tax deduction. Yes absolutely. It is something I strongly recommend, emphasizes Incedursun.

The consumer economist also highlights a third reason why BSU is still relevant.

– Regardless of whether interest rates in general in the market go up or down, BSU will often have a higher interest rate on deposits than, for example, on a normal savings account.

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– Will be careful

Now that the benefits are becoming fewer, it is easier to look for other methods of saving. However, Incedursun wants you to fill up the BSU before looking at other options.

– It can be worthwhile to save in mutual funds, but it really depends on how long it is until you buy a home. If you are going to buy a home within four to five years, then I would probably be careful about placing money to buy a home on the stock market, she says.

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– You have to be prepared that you can lose. Of course, you can also get a good profit, but there is always a risk.

Full account

It could be that you have been saving for many years and filled your BSU account to the maximum – NOK 300,000. Only then does Incedursun recommend looking at other forms of savings. For example, there are other savings account solutions.

With a housing savings account, you don’t get a tax deduction, but you get a good deposit interest. She also highlights savings in mutual funds as a good alternative.

– But I think that if you have the opportunity to top up the BSU account, I recommend it.

In order for the banks to register the savings amount so that you get the tax deduction, they often set deadlines for when you can top up the account for this year at the latest. These deadlines can come as early as December 28. In addition, it can take time to move money from other banks.

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It is therefore recommended that you move the money to the account as early as possible.

Saving tips

Derya Incedursun’s savings tip is to save evenly throughout the year.

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– If you are not the disciplined type, and have not entered the savings routine every month – many of us are – then I think it might be a good idea to set up a fixed deposit to a savings account or to a BSU account every month.

The amount depends entirely on the financial situation you are in. You can, for example, start with a 100 note.

– And then you can always change the amount of the fixed installment, if the economy changes, she continues.

Another way of saving, which has become an option for many, is “micro savings”.

– This is pretty cool, I think. You save without noticing it. You decide yourself how much is to be deducted each time you use your card. Every time you buy something, says the consumer economist.

2023-12-27 17:23:11
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