3 % VAT
3 % VAT on renovation in Luxembourg: conditions, covered work and how to apply
Building or renovating your main residence can be invoiced at 3 % VAT instead of 17 %, up to an advantage of 50.000 € per home. Which homes and which work qualify, and the two ways to get it.
- 3 %
- instead of 17 % VAT
- 50.000 €
- maximum advantage per dwelling
- 10 years
- minimum age for renovation
- 3.000 €
- minimum quotes for direct 3 %
The short version
- Building or renovating your main residence can be invoiced at 3 % VAT instead of 17 %. The advantage is capped at 50.000 € per dwelling.
- For renovation, the dwelling must be at least 10 years old when the work starts, and the work finished within 2 years. Within 5 years of buying a home, the age does not matter.
- For 3 % on the invoice, the company needs the tax authority’s approval before the work, on quotes of at least 3.000 € excluding VAT. Otherwise you claim the difference back.
- Solar panels on private housing are always invoiced at 3 % directly. Fitted kitchens, air conditioning, alarms and fees are excluded.
Who it is for
Anyone building or renovating a home that will be their own main residence, or, for a renovation, the main residence of a tenant. If part of the home is used for something else, the whole home qualifies when the main residence covers more than three quarters of the area, and otherwise only that share.
The total advantage is capped at 50.000 € per dwelling, built and renovated together. To keep the full advantage, the home must be used as a main residence for 2 years.
Renovation: which homes qualify
Substantial improvement work qualifies when:
- the home is at least 10 years old when the work starts, and the work is finished within 2 years of starting (phases can follow each other); or
- the work is done when you buy the home, finished within 5 years of the purchase.
Which work is covered
Covered, among others: facades and rendering, roof and watertightness, insulation, doors and windows, heating, controlled ventilation and solar thermal installations, electrical installation, sanitary equipment (except furniture and mirrors), coverings for floors, walls and ceilings, and painting inside and out.
Not covered: household equipment including fitted kitchens (except heating stoves), internal joinery other than stairs, doors and windowsills, special equipment such as alarms, home automation or IT, landscaping other than the direct access to the home and garage, fees of notaries, architects and engineers, air conditioning and wellness equipment, and internal blinds and curtains.
Solar panels on private housing are a separate case: supply and installation are always invoiced at 3 % directly by the installer, without the housing VAT procedure.
- Direct: approval before the workThe company files the request for direct application with the AED, with your signed quote. Quotes must total at least 3.000 € excluding VAT.
- Direct: 3 % on the invoiceOnce approved, the company invoices the eligible work at 3 %. Without approval it must invoice the normal rate.
- Refund: after the workIf the 3 % was not applied, you claim the difference: invoices above 3.000 € in total, each above 1.250 €, excluding VAT.
- Refund deadlineThe right to a refund lapses 5 years after 31 December of the year the VAT relates to.
Which route to choose
The direct route is simpler: you pay 3 % from the start and nothing needs claiming back. It needs the company to file the request before the work, and quotes of at least 3.000 € excluding VAT (several quotes from the same company can be added up). For smaller or unplanned jobs, the refund route remains: you pay 17 % and claim the difference with the paid invoices.
How it combines with the Klimabonus
The 3 % VAT and the Klimabonus are separate and add up: the Klimabonus is paid on the measure (heat pump, insulation, windows), and the VAT is reduced on the same invoice. The individual subsidy pages show both: heat pumps, solar panels, insulation and windows.
Questions
My house is 8 years old. Can I get 3 % VAT on a renovation?
Not on the renovation route, which needs a home at least 10 years old when the work starts. If you bought the home less than 5 years ago, work done for the purchase can qualify.
Is a new fitted kitchen at 3 % VAT?
No. Household equipment, including fitted kitchens, is excluded.
Is a heat pump at 3 % VAT?
Heating installations are covered when the home qualifies (main residence, at least 10 years old for a renovation). Air conditioning is excluded.
The company invoiced 17 %. Can I still get the difference?
Yes, through the refund: invoices above 3.000 € in total and each above 1.250 € excluding VAT, within 5 years after 31 December of the year concerned.