Tax deductions for home savings plans and loans

D├ęductions d'impots

Property loan deduction for personal use

Interest expense of property loans for personal use can be deducted from the taxable income. The deductible amount is dependent on the number of dependents in the household and the number of years of occupancy of the real estate.

Singles Couples 1st year of occupancy and following 5 years next 5 years After 10 years
without children - 2.000 € 1.500 € 1.000 €
with one child without children 4.000 € 3.000 € 2.000 €
with two children with one child 6.000 € 4.500 € 3.000 €
with three children with two children 8.000 € 6.000 € 4.000 €
with four children with three children 10.000 € 7.500 € 5.000 €

Deduction of premium for outstanding balance insurance

The premium for a decreasing capital life insurance subscribed to ensure the repayment of a loan granted for the acquisition of a real estate can be deducted from taxable income. The deductible amount is dependent on the number of dependent children and the age of the taxpayer subscribing to the insurance policy.

  Until the age of 30 Increase per year between
the age of 31 to 50
After the age of 50
without children 6.000 € 480 € 15.600 €
with 1 child 7.200 € 576 € 18.720 €
with 2 children 8.400 € 672 € 21.840 €
with 3 children 9.600 € 768 € 24.960 €
with 4 children 10.800 € 864 € 28.080 €
with 5 children 12.000 € 960 € 31.200 €

Tax deduction of home savings

In Luxembourg, contributions to housing savings are tax deductible (Article 111 L.I.R.).

The ceilings of deductible annual amounts are:

  From 18 until the
age of 40
After the age of 40
  Single Married Single Married
Without children 1.344 € 2.688 € 672 € 1.344 €
with 1 child 2.688 € 4.032 € 1.344 € 2.016 €
with 2 children 4.032 € 5.376 € 2.016 € 2.688 €
with 3 children 5.376 € 6.720 € 2.688 € 3.360 €
with 4 children 6.720 € 8.064 € 3.360 € 4.032 €
with 5 children 8.064 € 9.408 € 4.032 € 4.704 €

 

Conditions for deductibility

Article 111 / 1c:

On the terms outlined below, are also deductible as special expenses:

the contributions paid to authorized home loan and savings institutions to the Grand-Duchy of Luxembourg or in any of the Member States of the European Union under a home loan and savings contract signed in order to fund the construction, acquisition or improvement of a flat or a house used for personal housing needs, including the price of the land as well as the bond redemption incurred for the same purposes.

Deduction of special expenses

Example for a maried couple with two children

Deductible amounts in 2020 for savings and insurances, for a married couple having two children, if both parents were born in 1985, are:

  Amount
Mother savings pension 3.200 € / year
Father savings pension 3.200 € / year
Building savings account 5.376 € / year
Deductible insurance products
and consumer loans
2.688 € / year
Total 14.464 € / year