Interest subsidy for public sector employees
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An interest subsidy is granted to public sector employees (whether subject to the general regulations governing civil servants, the regulations governing government employees, or the collective agreement for salaried workers in the public sector) who are currently in active service with government administrations and departments or public bodies, provided they have taken out one or more loans for housing purposes. This subsidy is subject to certain conditions.
The interest subsidy is a form of interest aid, provided by the state, that may be granted to reduce the costs incurred when repaying a mortgage taken out for the construction, purchase or transformation of a dwelling used as a main and permanent residence.
Who is concerned
The subsidy is granted to public sector employees currently in active service with at least one year of service as of 1 January of the year for which the subsidy is requested. The subsidy can be granted for a total period of 25 years at most. Where both spouses or partners are public sector employees, the above conditions must be met by one of the 2 public sector employees.
Only one interest subsidy is granted per family or household.
The term 'household' refers to a relationship between 2 people (hereinafter referred to as 'partner' or 'partners') living together as a couple, regardless of the legal form underpinning that relationship.
However, provided that the individual is still entitled to this benefit upon retirement, they remain eligible for it for as long as they have at least one dependent child on 1 January of the current year.
Prerequisites
Borrowers who wish to receive an interest subsidy must have taken out a mortgage with a banking institution which has been approved in the European Union (EU) and in the European Economic Area (EEA) by no later than 1 January of the year for which they are requesting the subsidy for the purpose of:
- construction;
- purchase;
- transformation;
of owner-occupied housing located in Luxembourg.
The term 'owner-occupied housing' refers to: the only property owned, or to be owned, by the employee or the household, and which is/will be their actual and permanent residence.
Neither the employee nor their spouse or partner must be the owner, co-owner or beneficial owner of a property located in Luxembourg or abroad as at 1 January of the year in which the application is made.
Deadlines
The subsidy application must be submitted to the State Centre for Human Resources and Organisation Management (Centre de gestion et du personnel de l’État - CGPO) each year, before 1 July.
How to proceed
Submission and processing of the application
Employees who do not have access to the MyRH portal must submit their request online via their private or business eSpace on MyGuichet.lu.
This procedure requires:
- a LuxTrust product;
- a Luxembourg electronic identity card (eID); or
- an eIDAS-compliant means of authentication issued in another European country.
Employees with access to the MyRH portal cannot use MyGuichet.lu for this application.
The subsidy is granted for the term of the loan(s) taken out for the dwelling concerned, and may not exceed a maximum of 25 years.
For the purposes of awarding an interest subsidy and applying the repayment schedule, only those years for which a subsidy is requested and subsequently granted are taken into account.
The first application may be made following the year in which all or part of the loan was made available to the beneficiaries.
If there are multiple loans for the same dwelling, the same repayment schedule applies to all the loans.
In the dwelling is being built or transformed, it must be occupied or reoccupied within a period of 2 years as of 1 January of the year following that in which the first application was filed. The Minister for the Civil Service may grant an exemption.
In the event of the sale of a dwelling for which an interest subsidy was obtained and the purchase of a new dwelling, or in the event that the household is dissolved, the repayment schedule continues to apply. In the latter case, each of the former partners can continue to receive the subsidy during the remaining term provided for in the repayment schedule, as long as they meet all of the required conditions.
The employee must provide all information and details to confirm they fulfil all of the conditions for the granting of the subsidy. In the event of false statements, inaccurate information, an administrative error or a failure to comply with the 2-year occupancy period, the beneficiary may be required to reimburse the subsidy.
Amount of interest subsidy
The calculation of the subsidy takes into account:
- the family situation; and
- the outstanding balance of the housing loan(s) as at 1 January of the year for which the subsidy is being claimed.
Loans are taken into account when calculating the subsidy up to a maximum of EUR 400,000 per dwelling.
The amount of the interest subsidy is calculated on the basis of a repayment schedule spanning 25 years.
For an employee or household without any dependent children, the subsidy is 0.50%, calculated on the balance of the loan, multiplied by the rate specified in the repayment schedule.
It is increased by 0.50% for each dependent child.
'Dependent child' is taken to mean:
- any child for which the applicant, or their spouse or partner, receives child benefit; or
- any child who, up to the age of 27, is covered under the applicant’s health insurance scheme, or that of the applicant’s spouse or partner, and who lives with the applicant in the same household and is registered there.
For beneficiaries of an effective interest rate below the 2% reference rate, the calculated subsidy rate is decreased by the difference between this reference rate and the effective rate of the loan(s) taken out.
No subsidy is allocated if the total amount calculated is less than EUR 25.
Online services and forms
Who to contact
Ministry of the Civil Service Service for Interest Subsidies
- Address:
-
10, avenue John F. Kennedy
L-1885
Luxembourg
Luxembourg
B.P. 1807
- Phone:
- (+352) 247 83 117
- Email address:
- subventions@cgpo.etat.lu
Related procedures and links
Links
Further information
sur le Portail de la Fonction publique
Legal references
- Code administratif
-
Règlement grand-ducal modifié du 12 octobre 2001
concernant les subventions d’intérêt aux fonctionnaires et employés des communes, syndicats de communes et établissements publics placés sous la surveillance des communes ayant contracté un prêt dans l’intérêt du logement
