Posted on 20 February 2024

How to Deduct Interest on Your Mortgage? Discover How to Save on Your Taxes!

Discover how to deduct your mortgage interest in Luxembourg and save on taxes with our detailed guide on taxx.lu.

Have you made your dream come true by becoming the owner of your primary residence? Congratulations! Now you're wondering how this impacts your tax return in Luxembourg?

If you financed your property purchase with a loan, you can deduct the interest charges on your tax return! To do this, provide the tax authorities with a certificate from your bank showing the interest paid during the year.

The deductible amount varies according to two criteria:

Year you moved in
Composition of your household

The maximum deduction limit per person is:

5 first years: €3,000
Between 6 and 10 years: €2,250
After 10 years: €1,500

This ceiling is increased for the spouse, partner and each child in the tax household.

Example 1:

Patrick is married with 2 children, moved in in 2019. The limit is €3,000 per person, so €12,000 in total. He paid €4,500 in interest in 2023, everything is deductible!

Example 2:

Mia is in a civil partnership with 1 child, and moved in in 2009. The limit is €1,500 per person, so €4,500 in total. She paid €3,500 in interest in 2023, but received a €1,000 grant. Mia will be able to deduct €2,500.

If you have a loan for work on your main home, the interest will be deductible as a special expense.

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