How to Deduct Interest on Your Mortgage? Discover How to Save on Your Taxes!
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: €2,000
🔹Between 6 and 10 years: €1,500
After 10 years: €1,000
This ceiling is increased for the spouse, partner and each child in the tax household. 🧑🤝🧑👶
Example 1️⃣:
Patrick is married with 2 children, moved in in 2019. The limit is €2,000 per person, so €8,000 in total. He paid €4,500 in interest in 2021, everything is deductible!
Example 2️⃣:
Mia is in a civil partnership with 1 child, and moved in in 2009. The limit is €1,000 per person, so €3,000 in total. She paid €3,500 in interest in 2021, 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. 🛠️💰
Simplify your tax return with taxx.lu! The system does the calculations for you! 💻📊
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