Personal taxation · Luxembourg
Mortgage life insurance in Luxembourg: tax deduction
Mortgage life insurance (assurance solde restant dû) may qualify for tax treatment depending on the terms of the contract and of the loan it covers. An annual premium and a single premium are not necessarily calculated in the same way. Eligibility and increases must be established before estimating a benefit.
Financial Services Luxembourg · Licensed accountant · Head of the firm: Mickaël LOC. Editorial update: .
Read the contract and the purpose of the financing
Identify the risk, the sum insured, the beneficiary and the link with the loan. The mere mention of “credit insurance” does not show access to all the increases provided for certain decreasing-term life insurance contracts.
A premium financed by a loan, a refinancing or several contracts may require an additional review of the periods and the history.
Shared ceiling and increase
Annual premiums may fall within the common ceiling for certain insurance policies and personal interest. An eligible single premium may give access to a specific increase under the conditions provided, in particular for certain home financing arrangements.
It would be misleading to present the premium amount as an automatic deduction or to multiply an increase for each new policy without checking the conditions and history.
Fictitious comparison example
Two contracts cover the same loan with different payment terms. First compare the cover, the fees, the total cost and the constraints, then the deduction actually allowed each year.
An estimated tax saving is not enough to make a contract cheaper; it may be lower than a difference in premium and depends on the tax file.
File
- Full contract and annual certificate.
- Loan repayment schedule and purpose of the financing.
- Single premium, previous premiums and any refinancing.
- Household situation and other expenses within the common ceiling.
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.