Raiffeisen Naturally The blog

• A risk-free way to invest funds
• Deduct deposits 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).

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.

If the agreement is entered during the commitment period, the amounts in the saving account will 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 a main or usual home. Holiday homes or second homes are not included in this context.

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

• convert or modernise a dwelling
• buy a property

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

Up to the age of 40 inclusive:

After the age of 40:

N.B. the upper limits apply to the total of all deductible insurance bonuses. Age is the age of the adult policyholder 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 policyholder and the marginal tax rate.

Up to the age of 40 inclusive:

After the age of 40:

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

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

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