Last updated on 14 February 2024
How is the deductible limit for outstanding balance insurance (single premium) calculated?
The deductible limit for outstanding balance insurance (single premium) is calculated as follows:
- €6,000 + €1,200 per child in the household
- an additional 8% for each year after the policyholder reaches the age of 30.
Here's an example:
A family of 4:
- The mother, aged 38,
- Father, aged 40
- Two children
They can deduct up to €24,960 in total.
Explanation:
Increase for the father aged 40 :
- 6 000€ + 2 x 1 200 € = 8 400 €
- 8% x 10 x €8,400 = €6,720
Increase for the 38-year-old mother :
- 6 000 €
- 8% x 8 x €6,000 = €3,840
Good to know! Single-premium outstanding balance insurance is deductible every 5 years on your Luxembourg tax return for your main residence. This allows you to cover part of a mortgage today and another part in 5 years' time, while taking full advantage of the tax benefits.