You must keep the invoices for the costs of building or renovating your own home. The statutory retention period of 7 years does not apply in this case. You must keep these documents for as long as you claim a tax deduction for your (mortgage) interest.
Evidence for (mortgage) interest relief
The (mortgage) interest you pay on a loan for your tax-deductible home is tax-deductible. This deduction is now subject to a range of conditions.
One of these conditions is that you must prove that the borrowed money was used for the purchase, renovation or improvement of your tax-deductible home. The technical term for this is that you must historical causal link must demonstrate the relationship between the loan and the costs.
You provide this evidence by submitting the invoices you receive for those costs, supported where necessary by other supporting documents (such as specifications, quotes from contractors and the like).
How long should I keep it for?
Case law shows that the Tax and Customs Administration has the right to request, each year, supporting documentation for the (mortgage) interest you have claimed as a deduction in your tax return. This means that you must keep the supporting documents for the entire term of the loan(s). Loans to finance your own home usually run for 30 years. In that case, you must keep the supporting documents for (at least) as long as 35 years (the term of the loan plus the 5 years during which the tax authorities have the right to make a back-date claim for tax).
Tax Court
The matter has recently been brought before the tax court once again. And Court of Appeal of Den Bosch ruled in that case that the Tax and Customs Administration had wrongly requested the supporting documentation. An appeal has been lodged with the Court of Cassation against this ruling. Until the outcome of that appeal is known, it is advisable not to throw away the supporting documents relating to the loan(s) for your own home.
The couple bringing the case increased their mortgage debt in 2007 and 2008. The additional amount borrowed was used to renovate their home. In 2013, the Tax and Customs Administration sent a letter requesting that, as part of the assessment of their 2010 income tax return, they provide evidence to support the increase in their mortgage debt. No questions were asked regarding the tax returns for 2007, 2008 and 2009, which included the increase in the mortgage. The mortgage increase was naturally included in these returns.
The Court ruled that the Tax and Customs Administration had forfeited its right to request evidence by only raising questions about the matter six years after the mortgage had been increased, whilst in the meantime accepting the tax returns that had been submitted.