Tax deductions for home savings plans and loans
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 |
