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Home loan savings contract

With Raiffeisen and its partner Bausparkasse Schwäbisch Hall, you can open a home loan savings contract and benefit from the tax incentives that come with this kind of investment.
Your benefits
Tax incentives
Build up capital and use it to buy a home

The benefits of a home savings account

  • A risk-free way to invest funds
  • Deduct the deposits made on your savings account from your taxable income under ‘special expenditure’.
  • Depending on your personal situation, you may make tax savings which, when added to the interest earned on your savings, will help you earn an even higher return.
  • You are free to do as you please and make payments into the account at any time.
  • Thanks to your home savings account, you will be entitled to a housing loan at a preferential, fixed rate.
  • You can pass on your assets and the loan to certain members of your family (e.g. children or brothers and sisters).

Allocation of the agreed amount

In the case of tax deductions, the agreement comes with a commitment period of 10 years, which defines the possibilities for allocating the saved amounts. Regardless of whether or not the 10-year period has elapsed, the housing loan must be used for property-related projects.

Allocation of funds during the commitment period

If the agreement is entered during the commitment period, the amounts in the saving account must be assigned to a property investment in Luxembourg or abroad, as defined below:

  • The construction or purchase of an apartment or house
  • The conversion or renovation of an apartment or house
  • The purchase of a building plot for construction of an apartment or house
  • The repayment of the loans taken out for the investments mentioned above

The house or apartment must be lived in by the saver and serve as their main or usual home. Holiday homes or second homes are not included in this context.

Allocation of funds after the commitment period

If you no longer wish to build or renovate at the end of the 10-year commitment period, you can use your savings as you wish. 

Note: If the capital on the home savings account is not used for your own housing requirements, you will no longer be entitled to tax deductions on any future home savings accounts. 

To benefit from tax incentives

To benefit from these tax incentives, your home savings must be used to: 

  • convert or modernise a dwelling
  • buy a dwelling

Amounts paid in are tax deductible

Annual payments into the home savings account are deductible from taxable income at the following rates :

Up to the age of 40 inclusive:

Situation Maximum deductible amount per year
Single, without children 1344 EUR
Single, with 1 child 2688 EUR
Couple, without children 2688 EUR
Couple, with 1 child 4032 EUR
Couple, with 2 Children 5376 EUR
Couple, with 3 Children 6720 EUR
Additional children 1344 EUR per additional child

 

After the age of 40:

Situation Maximum deductible amount per year
Single, without children 672 EUR
Single, with 1 child 1344 EUR
Couple, without children 1344 EUR
Couple, with 1 child 2016 EUR
Couple, with 2 Children 2688 EUR
Couple, with 3 Children 3360 EUR
Additional children 672 EUR per additional child

N.B. the upper limits apply to the total of all deductible insurance bonuses. Age is the age of the adult contract holder on 1st January of the year in question.

Tax impact

The table below gives an indication of the maximum annual total tax impact according to the situation and age of the youngest adult contract holder and the marginal tax rate.

Up to the age of 40 inclusive:

Situation Maximum deductible amount per year
  22% 32% 39%
Single, without children +/- 315 EUR +/- 450 EUR +/- 560 EUR
Single, with 1 child +/- 550 EUR +/- 1.120 EUR +/- 1.125 EUR
Couple, without children +/- 635 EUR +/- 900 EUR +/- 1.125 EUR
Couple, with 1 child +/- 935 EUR +/- 1.335 EUR +/- 1.690 EUR
Couple, with 2 children +/- 1.225 EUR +/- 1.700 EUR +/- 2.240 EUR
Couple, with 3 children +/- 1.510 EUR +/- 2.180 EUR +/- 2.790 EUR

 

After the age of 40:

Situation Maximum deductible amount per year
  22% 32% 39%
Single, without children +/- 165 EUR +/- 235 EUR +/- 290 EUR
Single, with 1 child +/- 300 EUR +/- 560 EUR +/- 580 EUR
Couple, with 1 child +/- 315 EUR +/- 460 EUR +/- 560 EUR
Couple avec 1 enfant +/- 480 EUR +/- 695 EUR +/- 850 EUR
Couple, with 2 Children +/- 635 EUR +/- 900 EUR +/- 1.125 EUR
Couple, with 3 Children +/- 795 EUR +/- 1.125 EUR +/- 1.415 EUR

Examples on the basis of the INCOME TAX BRACKETS applicable as from the 2017 tax year:
 

Marginal tax rate 22%

  • Single person with annual income of +/- 30,000 EUR
  • Married couple with annual income of +/- 60,000 EUR
     

Marginal tax rate 32%

  • Single person with annual income of +/- 39,000 EUR
  • Married couple with annual income of +/- 78,000 EUR
     

Marginal tax rate 39%

  • Single person with annual income of +/- 48,000 EUR
  • Married couple with annual income of +/- 96,000 EUR

Reimbursement of tax incentives

The tax incentives must be reimbursed if, before the expiry of the 10-year period:

  • The amount of savings released after allocation is not directly allocated to a property-related investment 
  • The contract is terminated and the savings are refunded

The tax incentives will not be reimbursed if:

  • The home savings account agreement was terminated due to the death or permanent disability of the saver
  • The home savings account agreement is terminated after expiry of the 10-year commitment period
Home savings account

To set aside savings for your home or benefit from personalised advice on how to prepare the financing of your future property investment

Conditions for benefiting from tax incentives

The following are deemed to be deductible payments into the home savings account during the savings period:

  • The deposits provided for in the agreement
  • Any additional deposits
  • Administrative fees for the agreement
  • The interest paid on savings on 31 December each year

The tax incentives must be reimbursed if, before the end of the 10-year period:

  • The amount of savings released after allocation is not directly allocated to a property-related investment
  • The contract is terminated and the savings are refunded

The tax incentives will not be reimbursed if:

  • The home savings account agreement was terminated due to the death or permanent disability of the saver
  • The home savings account agreement is terminated after expiry of the 10-year commitment period

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