Principles & Conditions
The law provides that any resident of Luxembourg, at the time of execution of the notarial deed relating to the purchase of a dwelling for personal occupation, is entitled to a tax credit of a maximum amount of Euros 20 000, to be set off against the registration and recording duties normally payable.
The grant of the tax credit is subject to certain conditions, namely:
- actual and personal occupation of the dwelling purchased, within two years and for five years, unless otherwise provided for;
- prohibition to rent or use the property for other purposes over a period of five years;
- requirement of residence in Luxembourg at the time of execution of the notarial deed and the postponement of the grant if this requirement is met later;
- the law provides that the buyer must be a natural person “resident in the Grand Duchy of Luxembourg and registered at the population registry of a local authority”;
- persons who do not reside in Luxembourg yet but who intend to establish their effective residence there, will not immediately obtain the tax credit provided for by the law.
The relief is applied when they actually occupy the property. It is important to note that these buyers are also subject to the condition that the notarial deed should contain the undertakings provided under Article 7 of the law, in particular that of personally occupying the property.
To obtain refund of the duties, the buyer must apply in writing to the relevant office, supported by a certificate of residence.
After five years of occupation, the buyers are free to use their accommodation as they wish, since the relief is then final. To be entitled to another relief, two conditions must be met:
- the buyer must have an outstanding tax credit balance;
- the buyer must personally occupy this new dwelling.