Interest subsidy
Last update
The State may grant you an interest subsidy (aid for interest payments) in order to reduce monthly costs in respect of a mortgage loan contracted for the construction, purchase or improvement of a dwelling used as a main and permanent residence.
To calculate the interest subsidy, mortgage loans are taken into consideration up to EUR 200,000. This amount is increased by EUR 20,000 for each dependent child. The maximum amount to be subsidised is capped at EUR 280,000.
The interest subsidy rate depends on the income and composition of your household and can vary between 0.25 % and 3.50 %.
Who is concerned
In order to benefit from the interest subsidy, you must:
- be of legal age on the date the application is submitted;
- have a right to stay in Luxembourg for more than 3 months and be listed in the National Registry of Natural Persons; and
- be the sole owner of the dwelling.
Prerequisites
Conditions relating to the mortgage loan
As the applicant for the subsidy, you must be the sole holder of the loan.
The mortgage loan must be taken out with a view to acquiring, building or a improving a dwelling located in Luxembourg.
It must be taken out with a financial institution which is approved in the European Union and the European Economic Area (EEA), or with pension providers covered by the social security system.
Absence of ownership of another dwelling
Neither yourself nor any other member of your household may own more than a third of another, jointly owned, dwelling in Luxembourg or abroad;
Dwelling conditions
The dwelling for which the interest subsidy is granted must be used as your effective, main and permanent residence for at least 2 years.
If the interest subsidy continues to be paid beyond the 2-year limit, the condition of main and permanent residence must be met for as long as the subsidy is paid.
If you leave the dwelling during the period in which the subsidy is being paid, whether due to divorce, separation or any other reason, the Minister may, on written application and stating the reasons, grant the person who remains in the dwelling a provisional continuation of the interest subsidy for a maximum period of 2 years. If you continue to live in the property after this 2-year period and have taken over the dwelling and the mortgage on your own, you may apply for a continuation of the interest subsidy.
Conditions relating to income
Your household's income must be lower than the statutory limit.
Determining the household's income
The income used for the calculation of the interest subsidy is the income for the calendar year preceding the granting of the interest subsidy. If the household had no income during the year in question, the last known income is taken into consideration.
The household income which is used as the basis for the calculation is the sum of:
- the net income referred to in Article 10 of the amended law of 4 December 1967 on income tax, plus all other net income, even if not subject to tax, minus social security contributions and taxes actually withheld (e.g. income from paid employment or old-age pension, unemployment benefits, parental leave allowance, REVIS, RPGH, etc.);
- maintenance payments received;
- accident annuities;
- gross earnings for night work, Sunday work and work on public holidays;
- the amount of the family allowance that exceeds the amounts set by article 272 of the Social Security Code.
Maintenance payments made by you (for example for your children or to a divorced spouse) are deducted from the income.
Income from dependent children is not taken into account.
Deadlines
You can apply for an interest subsidy throughout the year.
How to proceed
Filing an application
If you wish to benefit from an interest subsidy, you must submit your application to the Single point of contact for housing assistance (Guichet unique des aides au logement) using a specific form (see form F1 under 'Online services and forms').
The completed and signed form along with all necessary supporting documents can be submitted to the Single point of contact for housing assistance:
- by post; or
- by depositing the form at their offices.
Please note: applications submitted electronically (using the email address guichet@ml.etat.lu) must be confirmed by postal mail to the administration.
Supporting documents
You must attach the following documents to the application form:
- a copy of your identity document;
- a declaration concerning the composition of your household (see form L/A21 under 'Online services and forms'), duly filled in and signed by you;
- a copy of the notarial deed of purchase of the property or of sale of property under construction (vente en état futur d’achèvement);
- a certificate showing the details of the mortgage loan (see 'Online services and forms') issued by the credit institution;
- a declaration of honour (see form A92 under 'Online services and forms') duly signed by yourself declaring that no member of your household owns another dwelling in Luxembourg or abroad. If the application is submitted by multiple applicants, it is necessary to add an individually signed declaration of honour for each applicant;
- documents providing proof of the household's income;
- for third country nationals (including British nationals): a document proving your right to stay in Luxembourg for more than 3 months.
If you are married or in a civil partnership, the application must be submitted and signed jointly by both spouses or partners. This double signature is no longer required if divorce proceedings have been initiated or the partnership has been ended.
In the event of divorce, you must attach to your application a copy of the deed of settlement and partition, which stipulates that the property is allocated to you.
Submission of additional supporting documents at the request of the Housing Aid Service
If you have made an application to the Housing Aid Service, supporting documents may be requested. If you have a file number, you can submit these documents using an online assistant on MyGuichet.lu (see 'Online services and forms'). The documents you need to provide are listed in the letter you received from the Housing Aid Service.
They can be submitted:
- with authentication using a LuxTrust product or an electronic identity card (eID); or
- without authentication.
These documents must be submitted within 3 months. If you fail to reply to the request or if you reply after the deadline, your file will be closed and your application rejected.
Family status
The family status taken into account is the one that exists on the date the interest subsidy is granted.
According to the law, a 'dependent child' is:
- any child for whom you receive a family allowance, who lives with you in the home and is registered there;
- any child up until the age of 27, who lives with you in the home, is registered there and is co-insured in your health insurance scheme.
Assessment and granting of the aid
The interest subsidy rate is calculated on the basis of the composition and net income of your household and may vary between 0.25% and 3.50%, without exceeding the nominal rate of the loan nor the maximum rate of 6%.
The interest subsidy is transferred to your loan account with the credit institution that granted the mortgage loan to finance the property. If you have a fixed-rate mortgage loan, the interest subsidy is transferred to the account you provided on the application form.
The interest subsidy is calculated on the basis of the interest due based on the amortisation schedule established by the credit institution.
However, when the interest rate used to calculate the interest subsidy is less than the reference interest rate set at 1.5%, the rate of the interest subsidy is reduced by half of the difference between the reference rate and the effective rate rounded down to the nearest 8th of a point. The rate of the interest subsidy can never exceed the effective rate.
Example:
When the effective interest rate of the loan is 1.2%, half of the difference between the reference rate and the effective rate rounded down to the nearest 8th of a point is 0.125. The difference between the reference rate and the effective rate is 0.3% (1.5% - 1.2%). So the rate of 0.3% must be halved (0.3% ÷ 2 = 0.15%) and rounded down to the nearest 8th of a point (0.15% becomes 0.125%). As a result, the interest subsidy granted will be reduced by 0.125%.
Information obligation
You must notify the Single point of contact for housing assistance of any changes to your family status, financial situation or loan repayment schedule, such as:
- another property acquisition, inheritance or donation;
- a change in relation to the subsidised home (for example: transformation, sale of the home, etc.);
- a change in the composition of your household (for example: the dissolution of the household by separation or divorce; marriage; moving house; the arrival, departure or death of an occupant or child);
- a change in the loan(s) for the property (for example: a change in interest rate or amount borrowed, early repayment, etc.).
Review of the file
Your file is automatically reviewed every 2 years.
If the conditions for continued subsidisation are met, the amount of the aid is reassessed on the basis of the new information. The reassessed aid is granted from the date of the review.
If, during this review, it is found that you have received undue financial aid, you must reimburse the overpayment retroactively.
Repayment
You must reimburse the interest subsidy if:
- you have made inaccurate or incomplete declarations for the granting or maintenance of aid;
- you have not respected the dwelling conditions regarding the subsidy; or
- it was unduly received.
Refusal of aid
The subsidy is denied to you or discontinued if:
- a member of your household (including yourself) already is or becomes the owner of more than a third of a another jointly owned dwelling, whether in Luxembourg or abroad;
- your application contains false or incomplete information;
- you do not submit all the required documents;
- one or more conditions for granting the aid are not met.
Combination with other types of aid
The interest subsidy may be combined with other aid in the form of a capital payment.
Online services and forms
Who to contact
Ministry of Housing and Spatial Planning Single point of contact for housing assistance
- Address:
- 11, rue de Hollerich L-1741 Luxembourg Luxembourg
- Phone:
-
(+352) 80 02 10 10
Monday to Friday from 8.00 to 16.00
- Fax:
- (+352) 45 88 44
- Email address:
- info@ml.etat.lu
- Website:
- http://www.logement.lu
Closed ⋅ Opens at 8.00
- Monday:
- 8.00 to 12.00 , 13.30 to 16.00
- Tuesday:
- 8.00 to 12.00 , 13.30 to 16.00
- Wednesday:
- 8.00 to 12.00 , 13.30 to 16.00
- Thursday:
- Closed
- Friday:
- 8.00 to 12.00 , 13.30 to 16.00
- Saturday:
- Closed
- Sunday:
- Closed
Related procedures and links
Procedures
Links
Further information
-
Obtenir une aide à l’accession à la propriété
sur logement.lu
-
Brochure "Acquisition & Construction – Individual housing aids"
on logement.lu
Legal references
-
Loi modifiée du 7 août 2023
relative aux aides individuelles au logement
-
Règlement grand-ducal du 7 août 2023
fixant les modalités d’exécution relatives aux aides individuelles au logement.
