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What the State funds

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What you will learn The four families of support, what they have in common, the rule governing access to all of them, and the errors that cost considerable sums.

Housing VAT and support in Luxembourg › The principle behind the schemes

Luxembourg supports housing through several distinct schemes. They share neither authority, nor procedure, nor timetable, but they do share one rule that decides everything.

The common rule

Almost all these schemes require a prior step.

The benefit is not claimed afterwards; it is secured beforehand. For value added tax, approval must be obtained before works begin. For acquisition duties, the application is made at the time of the deed. For support schemes, the application generally precedes the commitment.

Missing the moment cannot be made good, or only poorly. Some situations open a recovery route, heavier and slower; others close the benefit permanently.

This is the theme of the guide, developed in the article on why everything is applied for first.

The four families

Family What it reduces
Value added tax the cost of works
Acquisition duties the cost of purchase
Grants and subsidies targeted items, notably energy-related
Financing support the cost of credit

These families fall to different administrations, which is why no single counterpart covers them all.

They are not mutually exclusive. Combining them is possible within precise limits, covered in the article on combining schemes and its limits.

Their detail is covered branch by branch in this guide.

The condition that recurs throughout

One criterion runs through most of the schemes. It concerns use of the dwelling as a main residence.

Use of the dwelling as a main residence.

A second home, a conventional buy-to-let or a vacant property are generally excluded, with important exceptions worth knowing.

This condition is not assessed only at the time of application. It carries commitments over time, covered in the article on commitments over time.

The detail of this condition is covered in the article on main residence.

The costliest errors

Four errors, all avoidable and all expensive. They concern the timing of the application and the scope of the works.

Starting works before holding the tax approval, which forces recourse to a repayment procedure, heavier in every respect.

Not informing the notary of your situation before the deed, when it is the notary who makes the application on acquisition duties.

Overlooking a ceiling already partly used, some benefits being limited across the whole life of the dwelling.

Neglecting post-grant commitments, notably the obligation to declare a change of use.

These four errors represent five-figure sums, which justifies treating these steps as a project stage in their own right.

What this guide does not cover

Three subjects belong to other guides.

The cost of the project itself, covered from the budget angle in the guide on construction costs, which also addresses the base for acquisition duties.

The building permit and planning rules, covered in the corresponding guide.

Measurement and tendering.

The articles in this branch

The article on why everything is applied for first covers the theme and its consequences. The markers are detailed there.

The article on the four families of schemes covers the breakdown. Their counterparts are identified there.

The article on combining schemes and its limits covers possible combinations. The rules against combining are explained there.

This article 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.

Frequently asked questions

Four families of schemes, covering housing VAT, the tax credit on duties, housing support and energy support. Each falls to a separate administration.

Use of the dwelling as a main residence. It is checked scheme by scheme, since its definition varies slightly.

Four errors, relating to the timing of the application and the scope of the works. All are avoidable by acting before committing.

Construction prices, the building permit and the specification. Cross-references avoid duplication between guides.

Explore the articles in this guide

Housing VAT and support in Luxembourg