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Posted on 24 February 2021

Deduct a real-estate credit from your tax return in Luxembourg!

You can deduct the interest on debt from a real-estate credit from your tax return in Luxembourg
The amount of deductible interest on debt depends on whether the taxpayer has already moved into the property or not.
If the building is not yet occupied, the interest on debt is fully deductible until the taxpayer actually moves into the property.
As soon as the property is occupied by the household, the deductible amount of interest on a real-estate credit is limited and depends on the date of occupation.

Since 2017, the following deductible amounts of a real-estate credit apply in Luxembourg: 

In the year of move-in and the five following years, you can deduct interest on debt in the amount of 2,000€. In the five subsequent years, you can deduct 1,500€ from your tax return, and after that 1,000€ of interests are still deductible. 
This maximum amount is multiplied by the number of people in the household.
Example 1:
On May 6, 2017, two spouses purchase a house with their two minor children. To finance their house, they took out a loan on May 6, 2017, incurring an interest charge of 9,500€. They have been living in their house since the same day.
Deductible interest on debt from the tax return in Luxembourg: 4 x 2,000€ = 8,000€.
Example 2:
A family of 3 takes out a loan at the beginning of 2020 to finance their house, which causes 14,000 € in debt interest. On June 30th, 2020, the family moves into the building, of which the construction has just been completed.
Deductible interest on debt from the tax return in Luxembourg: 12.980,83€ (6.980,83€ + 6.000€)
  • January 1, 2020 - June 30th, 2020 (182 days): 14.000€ x 182/365 =   6.980,83€
  • July 1st 2020 - December 31, 2020 (184 days): 2.000€ x 3 =6.000€
With taxx.lu, it’s child’s play!
To include your real-estate credit on your tax return in Luxembourg, form 100, you must first go to your "Tax situation" on taxx.lu and check the appropriate box in the "Real estate in 2020" category. 

Then, you can go to the "Real Estate" form and fill in the fields to deduct your debt interest on your tax return. You can find the required information on your bank's annual certificate. 
If you move into your property during the year, then all you have to do is insert the date of your move and the system will automatically prorate the deductible amount.


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