16. Main residence

The acquisition of a primary residence in Luxembourg or abroad may entitle you to several tax benefits, mainly related to the deduction of mortgage interest paid on a loan taken out to finance the purchase.

Tax deductions for the primary residence

Mortgage interest

Interest paid on a mortgage loan for the acquisition or construction of a primary residence is deductible from income tax, within limits defined according to the date the property became available.

The deduction applies per person, meaning that each household member (spouse and children) can benefit from their own limit, thus adding up to the total deductible amount for the household.

Deduction limits for mortgage interest

Since the 2024 tax year, rules regarding mortgage interest deductions have changed. Now, it is the date of availability of the property that determines the deductible interest limit, replacing the previous reference based on the move-in date.

The table below shows the deduction limits for mortgage interest depending on the date of availability of the primary residence (for the 2024 tax return).

Date of availability	Deduction limit per person (€)
After 31/12/2022	Full deduction
Between 31/12/2018 and 01/01/2023	4.000€
Between 31/12/2013 and 01/01/2019	3.000€
Before 01/01/2014	2.000€

These amounts are cumulative for each household member, including the spouse and children.

Example for the 2024 tax return

A family of 4 (2 parents and 2 children) acquired their primary residence, with a date of availability in 2015.

The applicable limit is 3.000€ per person.
The household therefore benefits from a maximum deduction of 12.000€ per year (3.000€ × 4 people).

• Scenario 1: The family pays 15.000€ in interest
  The limit is 12.000€, so only 12.000€ is deductible. The 3.000€ excess cannot be taken into account.

• Scenario 2: The family pays 8.000€ in interest
  Since the actual interest is below the limit, the full 8.000€ is deductible.

Determining the date of availability of the property

Previously, the move-in date, i.e., the official registration date at the municipality, had to be indicated. Now, the date of availability determines the interest deduction limit.

• For properties occupied before 2022: indicate the move-in date.
• For properties available after 2023: indicate the date when the property was actually ready to be lived in.

The date of availability corresponds to the date when you could actually live in the property. It remains decisive for calculating the deductible interest limit.

Special cases

• Acquisition of a property off-plan (VEFA): the date of availability corresponds to the handover of the turnkey property.
• Minor works on a habitable property: if the property can be occupied upon acquisition (painting, refreshing, flooring), the date of availability is the acquisition date, even if some works are carried out afterwards.
• Complete renovation of an old or ruined property: the date of availability corresponds to the completion of works, when the property has become habitable with heating, sanitary facilities, kitchen, and sufficient living space.

Deductible costs for the year of acquisition of the primary residence

In the year of acquisition, and only for that year, the following costs are also deductible in addition to mortgage interest:

• Notary fees related to the loan opening
• Bank commission

These deductions require supporting documents: the notary’s detailed invoice for opening fees and a bank statement for the commission.

For Spuerkeess, the full costs appear on the bank statement and can serve as proof.

General information on the property in the year of acquisition

In the year of acquisition, certain general information on the property must also be provided for strictly informational purposes. This includes:

• The purchase price of the property
• The living area in square meters
• Contact details of the seller or developer
• Any other information allowing the property to be identified (address, type of housing, etc.)

This information does not affect the tax calculation and is used solely to complete the tax file descriptively.

Primary residence under construction

Deduction rules also apply to properties off-plan or under construction, provided the primary residence is available within two years of acquisition or the start of construction. The date of availability determines the deductible interest limit, as for a completed property.

Other costs related to the primary residence

It is important to note that only mortgage interest and certain costs directly related to financing the property (notary fees for loan opening, bank commissions) are tax deductible.

All other costs related to the primary residence are not deductible, even if they concern maintenance, improvement, or renovation.

Property tax paid on your primary residence should not be reported in the tax declaration.

Primary residence located in Luxembourg or abroad

The deduction of mortgage interest and related costs differs depending on whether the property is located in Luxembourg or abroad.

For a primary residence in Luxembourg

Interest paid on the mortgage and costs directly related to the acquisition or construction of the property (notary fees, bank commissions, etc.) are deductible from taxable income.
This means these amounts directly reduce taxable income, resulting in an immediate decrease in the tax due for the relevant fiscal year.
This deduction applies within the limits set according to the date of availability of the property and is cumulative for each member of the tax household.

Primary residence located abroad

The situation is different. Similar interest and costs are not deducted from Luxembourg taxable income. They are only used to adjust the overall tax rate, which reduces the rate applied to Luxembourg income without directly lowering taxable income.