Personal taxation · Luxembourg
Home savings plan: cap, age and use of funds
An eligible home savings plan has a cap separate from the one for insurance premiums and personal loans. The amount depends in particular on the reference age and the persons admitted to the household. The deduction requires a contract and a use of funds that comply with the scheme.
Financial Services Luxembourg · Licensed accountant · Head of the firm: Mickaël LOC. Editorial update: .
The reference caps
Since 2017, the basic cap is EUR 1,344 where the taxpayer's completed age at the start of the tax year is between 18 and 40, and EUR 672 otherwise. The increases and how they apply to the household must be checked.
The relevant age is the age at the start of the year, not your age when the return is completed. For a couple, do not calculate the cap using an improvised rule based only on the apparent holder.
Saving and deduction are not the same thing
The amount paid in may exceed the tax cap. The contract remains a savings decision: release conditions, term and use of the funds must be examined independently of the annual tax benefit.
A contract taken out abroad must meet the approval and scheme criteria. A local certificate or a similar trade name does not ensure deductibility in Luxembourg.
Fictitious example
A person is 40 on 1 January and turns 41 during the year. The age check is made at the statutory reference date, not on the last day of the year. The cap actually available still depends on the other conditions of the file.
The home savings plan must not be added to the common allowance for insurance premiums and consumer loan interest: the limits are separate.
Documents
- Annual certificate and identity of the taxpayer concerned.
- Contract terms and approved institution.
- Date of birth and household composition relevant to the cap.
- History of the use or repayment of the funds, if relevant.
The firm’s other tax engagements
Depending on your situation, the firm also handles tax, VAT and payroll, the regularisation of late tax filings and assistance during a tax audit. Fees are listed in the firm’s fee grid.
Official sources and scope
The rules apply to the year and profile concerned. Examples flagged as fictitious explain a method; they are not an individual validation. The documents and options of your file are covered by a separate engagement.