VAT refund or direct application of the super-reduced rate
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In principle, the standard rate of VAT (value added tax) is applicable to building works. To stimulate the building of housing, the state offers a super-reduced VAT rate on the construction and renovation of housing, provided the property is intended as a main residence.
You can benefit from this super-reduced VAT rate:
- either by direct application: eligible work carried out by tradesmen is directly invoiced at the super-reduced rate after having received approval from the Registration Duties, Estates and VAT Authority (Administration de l'enregistrement, des domaines et de la TVA - AED); or
- by means of a refund of the difference between the normal VAT rate and the super-reduced rate: in this case, you must apply to the AED for a refund of the VAT once you have, or have had, the eligible work carried out.
The total amount of the VAT advantage cannot exceed EUR 50,000 per built and/or renovated residence.
Any entitlement to a VAT refund will lapse 5 years after 31 December of the calendar year to which the tax to be repaid pertains.
Who is concerned?
Owners concerned
Any natural or legal persons who:
- are building or renovating a dwelling to serve as their main residence. The building's use can be assigned either:
- directly to the owner (natural person) of the dwelling that has been built or renovated;
- or indirectly to a third party for a renovated dwelling.
The simultaneous use of a dwelling as a main residence and for other purposes qualifies for the tax advantage:
- in its entirety provided that the surface reserved for the main residence exceeds 3/4 of the total area;
- in proportion to the part that serves as a main residence if its surface is less than or equal to 3/4 of the total area.
The VAT reimbursement procedure is intended for:
- the purchase of building materials, i.e. when you, as the owner, carry out the work yourself without using contractors;
- sales of new buildings which do not yet have a designated purpose and sales agreements for buildings yet to be constructed.
Works
- Eligible works
- Non-eligible works
You can only benefit from tax advantages for the construction, conversion or extension of a dwelling up to the level of the closed shell with the finishing stage, which includes:
- coatings for floors, ceilings and walls;
- the connection to public infrastructures: piping, water supply, electricity, gas, communications network, urban heating and road network.
The following works are included in the closed shell with finishing stage and can benefit from the super-reduced VAT rate:
- excavation works;
- load-bearing components contributing to the building's stability or solidity;
- elements contributing to the enclosure, coverage and watertightness of the structure, including screed;
- facades;
- plastering/rendering of the building;
- steps and ramps;
- ceilings and fixed partitions;
- portions of pipework, tubes, ducts and sheaths of all kinds lodged inside the walls, ceilings or floors, or contained in the mass of coating, as well as those buried in the ground, connecting the property to the public infrastructures;
- work to install flashing;
- lifts and goods lifts in apartment buildings, and in individual houses;
- structures and frames for doors, windows and glass partitions;
- sanitary equipment, with the exception of furniture and mirrors;
- doors, windows, glass partitions and conservatories;
- installation of heating, controlled ventilation and solar-thermal collectors;
- electrical installation;
- ironwork and locks in the building;
- all kinds of coatings for walls, floors and ceilings;
- indoor and outdoor painting, including wallpapering.
You cannot benefit from a super-reduced VAT rate for:
- household equipment (including fitted kitchens), with the exception of heating stoves;
- internal carpentry and joinery other than stairs, ramps, doors and windowsills;
- special technical equipment (e.g. alarm, home automation installation, IT equipment, etc.);
- furnishing of the surrounding areas, with the exception of the direct access route to the dwelling and to the garage;
- notaries', architects' and consulting engineers' fees;
- air-conditioning systems and 'wellness' devices;
- internal blinds and curtains;
- any other works not explicitly mentioned on the list of work eligible for the tax advantage.
Prerequisites
Eligible works
The works undertaken to build or renovate a dwelling must be included on the list of eligible work for the super-reduced VAT rate.
As regards the building of a dwelling, the eligible work includes:
- the construction of a dwelling in compliance with a contract for the sale of buildings to be built and/or a contract for the lease of works or industry;
- any construction works carried out either fully or partially by the owner themselves, or with the help of different contractors;
- the transformation, into a dwelling, of a building or part thereof, previously used for other purposes (e.g. the transformation of an office building into residence);
- the extension of a dwelling by adding or extending rooms;
- the construction, alteration or extension of garages and parking spaces:
- adjoining or separated;
- located close to the dwelling;
- provided that they are used with the dwelling by the owner.
As regards the renovation of a dwelling, eligible types of work (e.g. replacement of the windows, refurbishing of the floor, interior painting, etc.) include:
- substantial improvement work:
- made at the moment of the purchase of a dwelling;
- completed within 5 years of the date of acquisition;
- substantial improvement work on a dwelling:
- whose construction dates back at least 10 years at the beginning of the works;
- completed within 2 years of having been started. Periods of renovation may come one after another, with or without intervals between them.
MyGuichet.lu account
To carry out the online procedures reserved for private individuals, you must have a private eSpace on MyGuichet.lu.
How to create a private eSpace on MyGuichet.lu
A tutorial is available to help you set up a private eSpace on MyGuichet.lu if you do not already have one.
To use the online procedures reserved for professionals, you must have a business eSpace on MyGuichet.lu.
How to create a business eSpace on MyGuichet.lu
There are 2 possible scenarios:
- You are a new user of MyGuichet.lu. You must:
- first register on MyGuichet.lu; and
- then create a business eSpace.
- You already have a private eSpace on MyGuichet.lu. You can directly create a business eSpace without having to register again.
Further information as well as tutorials in relation with the business eSpace are available in our dedicated help page.
Deadlines
Any entitlement to a VAT refund will lapse 5 years after 31 December of the calendar year to which the tax to be repaid pertains.
How to proceed
Submission of the refund application by a private person
If, as a private person, you have not benefited from the direct application of the super-reduced rate, you can apply for a refund of the VAT, provided that:
- your application:
- concerns a total amount excluding VAT exceeding EUR 3,000;
- covers a period of at least 6 months;
- each invoice, excluding VAT, exceeds EUR 1,250;
- the 5-year limitation period for the VAT refund has not passed.
As an private person, you must submit your request to the AED:
- online, via your MyGuichet.lu private eSpace after authentication using a LuxTrust product or an electronic identity card (eID); or
- by post using the completed and signed VAT refund application form (see ‘Online services and forms’).
The refund on invoices relating to the purchase and supply of materials or services provided by companies established outside Luxembourg is only possible if the company based abroad has a Luxembourg VAT number and issues invoices at the normal VAT rate in Luxembourg.
Supporting documents
You must also enclose with your application:
- the invoice statement form (dynamic or static version) accompanied by:
- original invoices mentioning the status of the built or renovated dwelling;
- proof of payment;
- any import documents proving payment of the tax, where such documents have been drawn up ;
- a copy of the notarised property deed for buildings that:
- are new builds;
- which have not been subject to any assignment of any kind;
- a written declaration confirming that the dwelling in question is or will be assigned as a main residence, either:
- directly for yourself;
- or indirectly for a third party;
- a written commitment to:
- declare to the administration, within one month, any change in the use of the dwelling concerned;
- reimburse the administration any amount unduly received.
The administration may request additional supporting documents.
Direct application of the super-reduced rate by the professional
Procedure to follow
In principle, the contractors (builders, electricians, heating engineers, etc.) carrying out the work should apply the super-reduced rate directly for building and renovation works, observing the established limits and conditions.
In this case, you, as a professional, must submit an application for approval to the AED in order to be able to directly apply the super-reduced rate to the specific type of work described in said application before the commencement of any work. The application for approval must be:
- signed by you (the supplier);
- countersigned by your client;
- together with:
- information about your company;
- details relating to the building in question and its owner, completed by the owner (especially if the owner intends to let the building out to a third party);
- a brief summary description of the nature of the works to be carried out, and their approximate cost.
You can submit your application using a form to be sent to the AED or via an online procedure via MyGuichet.lu (see ‘Online services and forms’).
Without that approval, your company is required to apply the tax rate which is usually applied for that type of work, and the owner must go through the refund procedure to secure, if applicable, the refund of the VAT paid beyond the super-reduced rate.
In practice, you can send the application for the super-reduced rate, together with the estimate, to your client for approval, completion and signature.
Filing an application through MyGuichet.lu
As a supplier, you can submit a request for direct application of the super-reduced rate via an online procedure available in your business eSpace on MyGuichet.lu (see ‘Online services and forms’).
This is a procedure with authentication that requires a LuxTrust product or an electronic identity card (eID).
You can also use this procedure to request the modification/closure or cancellation of an approval (see ‘Online services and forms’).
The client must give their prior consent by signing a mandate. This mandate includes information about the owner and the dwelling, as well as declarations and commitments. The mandate is a mandatory document that must be attached to the online procedure.
Amount of aid
The total amount of the VAT advantage is no more than EUR 50,000 per dwelling, whether built and/or renovated.
To find out about the amount of the tax advantage that is still available for a dwelling, you can submit a request online via MyGuichet.lu from your private eSpace (see ‘Online services and forms’).
Appeal
You can lodge a complaint against a refusal decision with the relevant AED tax office:
- in writing;
- within 3 months of the date of notification of the decision.
You can then lodge an appeal against the second refusal decision by the director of the AED :
- before the district court of and in Luxembourg;
- within 3 months of the notification of this decision;
- by resorting to the assistance of a lawyer.
Obligation
To qualify for the full VAT advantage, you must use the dwelling as a main residence for a period of 2 years.
This period begins on 1 January of the year following that in which the eligible work was completed.
Penalty: repayment of the VAT to the administration
The tax advantage is withdrawn if the dwelling:
- is assigned for purposes other than main residence within 2 years; or
- has not been assigned to any purpose during this period or before a possible resale.
The tax advantage must be repaid in full with statutory interest from the day it is granted, which is equivalent to invoicing the work at the normal VAT rate.
Online services and forms
Who to contact
-
Registration Duties, Estates and VAT Authority Tax Office 12
- Address:
-
308, route d’Esch
L-1471
Luxembourg
Luxembourg
B.P. 31, L-2010 Luxembourg
- Email address:
- lux.imp12@en.etat.lu
Closed ⋅ Opens Monday at 8.30
- Saturday:
- Closed
- Sunday:
- Closed
- Monday:
- 8.30 to 12.00, 14.00 to 16.00
- Tuesday:
- 8.30 to 12.00, 14.00 to 16.00
- Wednesday:
- 8.30 to 12.00, 14.00 to 16.00
- Thursday:
- 8.30 to 12.00, 14.00 to 16.00
- Friday:
- 8.30 to 12.00, 14.00 to 16.00
Related procedures and links
Procedures
Links
Further information
-
TVA logement (brochure)
sur le Portail de la fiscalité indirecte
-
Application directe du taux super-réduit
sur le Portail de la fiscalité indirecte
Legal references
-
Loi modifiée du 12 février 1979
concernant la taxe sur la valeur ajoutée
-
Règlement grand-ducal modifié du 30 juillet 2002
concernant l'application de la taxe sur la valeur ajoutée à l'affectation d'un logement à des fins d'habitation principale et aux travaux de création et de rénovation effectués dans l'intérêt de logements affectés à des fins d'habitation principale et fixant les conditions et modalités d'exécution y relatives
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