What the State funds
Four families, falling to different administrations: value added tax, acquisition duties, grants and subsidies, and financing support. Each has its counterpart and its deadlines.
No single counterpart covers them all, which means running the steps in parallel. And the beneficiary is not always the applicant: for VAT it is the professional who lodges, for duties it is the notary.
- What the State funds
- Why everything is applied for first
- The four families of schemes
- Combining schemes and its limits
| Family | Object | Competent administration |
|---|---|---|
| Housing VAT | Reduced rate on works | Registration administration |
| Acquisition duties | Tax credit on the duties | Registration administration |
| Housing support | Grants and premiums | Ministry of Housing |
| Energy support | Refurbishment and equipment | Competent administration |
Housing VAT
The standard rate applying to building works is seventeen per cent; the super-reduced rate applying to a dwelling used as a main residence is three per cent. The gap with the reduced rate runs into tens of thousands of euros.
A decisive and little-known distinction: for creation works, the benefit is reserved to dwellings serving as the owner's own main residence. But for renovation works, dwellings made available to third parties do qualify, provided the third party establishes their main residence there. A landlord therefore cannot create at the reduced rate, but can renovate at it.
Acquisition duties
A tax credit is set against the duties owed on purchasing a dwelling intended for personal occupation. It is granted per purchaser, which doubles it on a joint purchase.
It works as a personal counter: where the duties owed do not reach its total amount, the balance remains usable on other purchases. This is the exact opposite of the VAT ceiling, which follows the dwelling.
Housing support
Unlike the tax schemes, this support is means-tested. The method of calculating income was revised in 2026 to take in all income, including income not taxable in Luxembourg.
A practical consequence: do not give up on the tax schemes on the ground that income seems too high for the support, the former not depending on means.
Securing and tracking
Obtaining a benefit is not keeping it. Commitments outlive the decision, with periods and declaration deadlines that differ between schemes.
A decisive point of timing: for VAT, the two-year period of use runs from 1 January of the year following completion of the works, not from handover.
The five rules to remember
Never start works before approval, failing which the firm is bound to invoice at the standard rate.
Check the ceiling balance before buying, it following the dwelling and not the purchaser.
Inform the notary of your intention to occupy before the deed is prepared.
Declare any change of use within the period specific to each scheme, the shortest being one month.
Check the state of the law at the time of commitment, the field being in motion.
Why this guide publishes no amounts
A deliberate and explained choice. The ceilings have been amended several times, and a package of measures presented in July 2026 announces further ones, some of which remain conditional on European approval.
The amounts circulating online therefore differ according to the date their source was written, with nothing signalling this to the reader. The amount applicable to a given transaction must be obtained from the notary or the competent administration.
This guide reflects the state of the schemes at the date of checking and serves professional orientation. It does not replace tax advice or consultation of the competent administrations.