Applying for a VAT refund or the direct application of the super-reduced rate

Non residents

Residents

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.

It is possible to benefit from the super-reduced VAT rate:

either by direct application: eligible work carried out by the 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 a refund of the difference between the normal VAT rate and the super-reduced rate. In this case, the person who carried out the eligible works or had eligible work done may apply for a VAT refund from the AED.

The total amount of the VAT benefit 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.

The eTracking function for hardcopy (paper) forms is available for this procedure. This option allows users to track the progress of administrative procedures by email and/or by SMS.

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:

purchases of construction materials, i.e. when the owners themselves carry out work without engaging the services of various tradesmen;
sales of new buildings which do not yet have a designated purpose and sales agreements for buildings yet to be constructed.

Eligible works

The tax advantage is only granted for the construction, conversion or enlargement of a dwelling to the level of the closed shell with finishing stage including:

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.

Non-eligible works

The following are excluded from the super-reduced VAT rate:

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;
other works not explicitly mentioned on the list of work eligible for the tax benefit.

Prerequisites

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;
construction works carried out either fully or partially by the owner themselves, or with the help of various tradesmen;
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 or rented with the property by the owner.

As regards the renovation of a dwelling, eligible types of work (e.g. construction and demolition of internal separating walls, addition of new doors or windows, filling of existing doors or windows) include:

substantial improvement work:
- made at the moment of the purchase of a home;
- completed within 5 years of the date of purchase;
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.

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

Applicants who have not benefited from the direct application of the super-reduced rate may claim a refund of VAT, provided that:

the 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.

The applicant must submit their application to the AED using the completed and signed VAT refund application form.

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

The application must be accompanied by the following:

the invoice statement form (dynamic or static version) accompanied by:
- original invoices mentioning the status of the housing built or renovated;
- proof of payment;
import documents showing payment of the tax, if they were issued or established;
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 statement that the dwelling concerned is or will be used by the applicant for the purpose of main residence:
- either directly by the applicant themselves;
- or indirectly by 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

In principle, the tradesman (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, the tradesman must, before the commencement of any work, 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 their application. The application for approval must be:

signed by the supplier;
countersigned by the client;
together with:
- details relating to the business;
- details relating to their client and to the building in question, 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.

Without that approval, the business 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, the supplier sends the client the application for the super-reduced rate together with the quote, so that the client can approve it, complete it, and sign it.

Amount of aid

The total amount of the VAT advantage is no more than EUR 50,000 per built and/or renovated residence.

Appeal

The applicant may lodge a complaint against the refusal decision with the relevant tax office of the AED:

in writing;
within 3 months of the date of notification of the decision.

The applicant may then lodge an appeal against the second refusal decision of the AED's Director:

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

Eligibility for VAT advantage is subject to the condition that the dwelling be used 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 housing:

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.

In those cases the tax advantage must be repaid in full, with interest at the legal rate as from the date on which it was granted. This amounts to the normal invoicing of work at the standard VAT rate.

If the property is sold during the repayment period (2-year main residence period), it is in the interests of the beneficiary of the tax advantage to make sure of the use the buyer intends to make of it.

Only a failure to designate the property for a given use, or the changing of that designated use, will trigger the repayment procedure. The sale of the property itself is not taken into consideration.

Forms / Online services

Demande de remboursement TVA

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Antrag auf Erstattung der Mehrwertsteuer

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Demande de remboursement TVA - Logement

Télécharger le formulaire PDF, 1.43 Mb

Antrag auf Erstattung der Mehrwertsteuer (MwSt.)

Das Formular herunterladen PDF, 1.85 Mb

Relevé des factures - ANNEXE Remboursement TVA

Télécharger le formulaire PDF, 789 Kb

Liste der Rechnungen - ANHANG Mehrwertsteuerrückerstattung

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Note explicative sur le remboursement de la TVA

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Anleitung zum Ausfüllen des Formulars Rückerstattung

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Demande d'application directe du taux de 3% TVA (Agrément)

Télécharger le formulaire PDF, 1.19 Mb

Antrag für die direkte Anwendung des Mehrwertsteuersatzes von 3%

Das Formular herunterladen PDF, 1.19 Mb

Déclaration et engagement

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Mitteilung und Verpflichtungserklärung Vermieter

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Relevé des factures à 3% - ANNEXE Agrément TVA

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Liste der Rechnungen zu 3% - ANHANG Genehmigung TVA

Das Formular herunterladen PDF, 855 Kb

Note explicative sur le formulaire de demande d’application directe du taux de TVA de 3%

Télécharger le formulaire

Anleitung zum Ausfüllen des Formulars Direktanwendung des MWSt.-Satzes von 3 %

Das Formular herunterladen

Who to contact

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Registration Duties, Estates and VAT Authority
Tax Office 12

308, route d’Esch
L-1471 Luxembourg
Luxembourg
Postal address :
308, route d’Esch - L-2010 Luxembourg

lux.imp12@en.etat.lu Tax Office 12 Path to Tax Office 12

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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