Posted on 31 July 2023

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! 💻📊

#InterestDeduction #MovableLoan #Luxembourg