Tax Deduction for Mortgage Life Insurance in Luxembourg: 2026 Limits Explained
In Luxembourg, mortgage life insurance (ASRD) premiums are tax-deductible under Article 111 of the LIR. The standard ceiling is €672 per household member per year for periodic premiums. With a single premium, this limit can reach €15,600 or more depending on your age and family situation, thanks to an exceptional uplift available when purchasing your primary residence.
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Compare ASRD policies in Luxembourg →Legal framework: Article 111 LIR and Circular 111/1
The tax deductibility of mortgage life insurance premiums in Luxembourg is governed by Article 111 of the Income Tax Act (LIR), supplemented by Circular L.I.R. No. 111/1 of 2 November 2017. This circular sets out the applicable scales and conditions for deduction.
Mortgage life insurance is a decreasing term life policy designed to cover the repayment of a home loan in the event of the borrower’s death — and often total permanent disability. Its premiums are deductible as special expenditure under Article 111 of the LIR.
Luxembourg’s tax advantage for mortgage insurance is one of the most generous in Europe. With a single premium, a taxpayer aged 50 or over can deduct up to €15,600 in a single tax year (with no dependent children), and more depending on the number of children.
Two deduction schemes apply depending on how the premium is paid:
Periodic premiums (annual, monthly, etc.)
Standard ceiling of €672 per household member per year. This ceiling is shared with other deductible insurance policies (car liability, home liability, life insurance ≥ 10 years, disability, health) and with consumer loan interest charges since the 2017 tax reform.
Single premium (lump-sum payment)
Exceptional uplift on the deduction ceiling when purchasing, building, extending or renovating your primary residence, or acquiring business premises. The deductible amount ranges from €6,000 to €15,600 or more depending on age and number of dependent children. This uplift can be renewed every five years under certain conditions.
Sources: Administration des Contributions Directes — Article 111 LIR · Circular L.I.R. No. 111/1 of 2 November 2017
Periodic premiums: the €672 per-person ceiling
If you pay your mortgage life insurance through annual or monthly premiums, your tax deduction is capped at the standard Article 111 LIR ceiling, set at €672 per household member per year.
| Family situation | Household members | Total annual ceiling |
|---|---|---|
| Single, no children | 1 person | €672 |
| Married or civil-partnership couple* | 2 persons | €1,344 |
| Couple + 1 child | 3 persons | €2,016 |
| Couple + 2 children | 4 persons | €2,688 |
| Couple + 3 children | 5 persons | €3,360 |
*Jointly assessed. Source: Article 111 LIR — 2026 scales.
The €672 per-person ceiling is shared across all your deductible insurance policies AND consumer loan interest charges. If you already pay €400 in car liability premiums and €150 in home liability premiums, you have only €122 left for your ASRD periodic premiums. In this scenario, a single premium may offer a far greater tax advantage.
Source: Guichet.lu — Deductible insurance premiums and contributions · Circular L.I.R. No. 111/1
Single premium: exceptional uplift on the deduction ceiling
Paying your mortgage life insurance as a single premium (one lump-sum payment) entitles you to an exceptional uplift on the deduction ceiling. This highly advantageous tax scheme allows you to deduct several thousand euros in a single tax year.
How is the single-premium uplift calculated?
Base uplift
€6,000 + €1,200 per dependent child. This base uplift applies to all taxpayers regardless of age. Examples: no children: €6,000 · 1 child: €7,200 · 2 children: €8,400 · 3 children: €9,600.
Age-related additional uplift (above 30)
For taxpayers over 30, the base uplift increases by 8% for each full year of age beyond 30 at the time of taking out the policy. This additional uplift cannot exceed 160% of the base uplift — the maximum ceiling is therefore reached at age 50 (20 years beyond 30).
Total deductible ceiling
Base uplift + additional uplift. The maximum ceiling for a taxpayer aged 50 or over with no children is €15,600 (€6,000 + €9,600). For couples, each spouse has their own ceiling calculated on their individual age — but each child triggers only one uplift, which the couple may allocate between themselves as they see fit.
The single-premium uplift is renewable every five years. If you renegotiate your mortgage, carry out extension works, or take out a new ASRD, you can claim it again — subject to deducting any uplifts already obtained in the previous five years for the same property.
Sources: ACD — Single premium · Guichet.lu — Insurance premium deduction
Single-premium deduction ceilings 2026
The table below summarises the deduction ceilings for single premiums based on the taxpayer’s age at the time of taking out the policy and the number of dependent children. These figures come from Circular L.I.R. No. 111/1 of 2 November 2017, which remains in force in 2026.
| Age at subscription | No children | 1 child | 2 children | 3 children |
|---|---|---|---|---|
| ≤ 30 years | €6,000 | €7,200 | €8,400 | €9,600 |
| 35 years | €8,400 | €10,080 | €11,760 | €13,440 |
| 40 years | €10,800 | €12,960 | €15,120 | €17,280 |
| 45 years | €13,200 | €15,840 | €18,480 | €21,120 |
| 50 years + | €15,600 | €18,720 | €21,840 | €24,960 |
Ceilings apply per taxpayer based on their own age. For couples, each spouse has their own ceiling — but each child entitles the household to only one uplift, to be allocated between spouses. Source: Circular L.I.R. No. 111/1 · 2026 scales.
Sources: ACD — Single premium · Circular L.I.R. No. 111/1 · Logement.public.lu — Mortgage life insurance
Shared ceiling with other insurance policies
The €672 per-person ceiling under Article 111 LIR is shared with all deductible insurance premiums AND consumer loan interest charges. Since the 2017 tax reform, all these items fall under a single combined ceiling. The following are deductible within this envelope:
the liability portion of car and home insurance (only the civil liability cover is deductible, not material damage cover), life, death and disability insurance taken out for an effective term of at least 10 years, supplementary health insurance, and interest on consumer loans (excluding mortgage and business loans).
Important note: before 2017, interest charges had a separate ceiling. Since the circular of 2 November 2017, everything falls under the single €672 per-person ceiling. If you are already paying €200 in interest on a car loan, you have only €472 left for all your deductible insurance premiums.
Source: ACD — Insurance contributions and premiums (Art. 111 LIR) · Circular L.I.R. No. 111/1
Practical examples of ASRD tax deduction
Example 1: Single person, age 35, single premium
Profile: Marc, 35, single with no children, purchasing his primary residence. Single ASRD premium: €8,000.
Ceiling calculation: base uplift: €6,000 + additional uplift: 8% × €6,000 × 5 years (35 – 30) = €2,400 → ceiling: €8,400. The €8,000 premium is fully deductible.
Estimated tax saving: at a marginal tax rate of 32%, the saving is €8,000 × 32% = €2,560 in the year of subscription.
Example 2: Couple, both aged 45, 2 children, single premium
Profile: Sophie and Thomas, both 45, married with 2 dependent children. Each takes out an individual ASRD policy. Under Article 111 LIR, each spouse has their own age-based ceiling, but each child may trigger only one uplift, freely allocated between the two spouses.
Optimal allocation: Thomas (45) claims both children → ceiling: (6,000 + 2 × 1,200) + 8% × 8,400 × 15 = 8,400 + 10,080 = €18,480. Sophie (45, no children allocated) → ceiling: 6,000 + 8% × 6,000 × 15 = 6,000 + 7,200 = €13,200. Combined couple ceiling: €31,680.
Estimated tax saving: if the couple deducts €28,000 in total (within their respective ceilings) at a marginal rate of 40%, the saving reaches €11,200.
These examples are for illustrative purposes only. The actual tax saving depends on your marginal tax rate, personal circumstances, and the actual premium paid. For a simulation tailored to your situation, compare ASRD offers and consult a tax adviser or the Administration des Contributions Directes.
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How to declare your ASRD on form 100F
The deduction is claimed in your Luxembourg annual tax return (form 100F, or online via MyGuichet.lu). Enter the amounts under « Special Expenditure », section B.b, covering insurance premiums and contributions. Returns must be filed by 31 December of the year following the tax year in question.
Periodic premiums
Enter the amount shown on the tax certificate issued by your insurer. Add this to your other deductible premiums (car liability, home liability, etc.) and any interest charges. The total must not exceed €672 × number of household members.
Single premium
Enter the amount on the line dedicated to single premiums. State your age at the time of subscription and the number of dependent children allocated to your ceiling. The ACD will calculate the applicable ceiling. Attach the tax certificate issued by your insurer.
Keep all supporting documents for at least 5 years after filing (the standard limitation period in Luxembourg), and ideally 10 years in the case of a single premium — the limitation period may extend to 10 years for incomplete or incorrect returns. The ACD may request them during a tax audit.
Sources: ACD — Individual tax forms (100F) · Guichet.lu — Deductible expenditure · ACD — FAQ for residents (limitation periods)
Common mistakes to avoid when filing
Claiming ineligible material damage cover
Only the portion covering death and/or disability risk is deductible. Cover for material damage (theft, fire, glass breakage, Casco, etc.) is not deductible. Check the details on your annual tax certificate from your insurer.
Unknowingly exceeding the €672 ceiling
Add up all your deductible premiums AND consumer loan interest. If the total exceeds €672 × number of household members, the excess generates no tax benefit. The ceiling has been shared since 2017.
Claiming the single-premium uplift for a rental property
The exceptional uplift is strictly reserved for primary residences or business premises. For a buy-to-let investment, only the standard €672/person ceiling on periodic premiums applies.
Overlooking the five-year rule for single premiums
If you have already benefited from the uplift within the past five years for the same property, the new ceiling is reduced by the amounts already deducted. Ignoring this can result in a tax reassessment.
Counting children twice for a couple
For couples taking out two individual policies, each child may trigger only one uplift. The couple must decide which spouse claims the uplift for each child — it cannot be claimed twice.
Early termination and tax clawback
If you cancel your ASRD before the end of the loan term (sale of the property, early repayment, etc.), Article 111 of the LIR provides for a tax clawback of benefits obtained in certain cases — particularly for single premiums. The exact conditions are set out in Circular L.I.R. No. 111/1 and in your insurance contract.
| Time elapsed since subscription | Applicable rule |
|---|---|
| Less than 2 years | Potential full clawback of deductions obtained |
| Between 2 and 5 years | Partial clawback on a pro-rata basis |
| After 5 years | In principle, no clawback |
Source: Article 111 LIR · Circular L.I.R. No. 111/1. These rules may vary depending on the circumstances of cancellation; consult a tax adviser for your specific situation.
Strategy: if you are considering selling your primary residence within the next five years, periodic premiums eliminate any risk of tax clawback in the event of early cancellation or sale.
Frequently asked questions about ASRD tax deduction
What is the tax deduction ceiling for ASRD with annual premiums?
The deduction ceiling for periodic premiums is €672 per household member per year under Article 111 LIR. For a couple with 2 children, the total ceiling is €2,688. This ceiling is shared with your other deductible insurance policies (car liability, home liability, life insurance, etc.) and consumer loan interest since the 2017 tax reform.
How much can I deduct with a single ASRD premium?
With a single premium, the deduction ceiling ranges from €6,000 to €15,600 or more depending on your age and the number of dependent children allocated to your ceiling. For a taxpayer aged 30 or under with no children: €6,000. For someone aged 50 or over with no children: €15,600. See the ceiling table for your specific situation.
Does the ASRD tax deduction apply to cross-border workers?
Yes, non-resident taxpayers treated as Luxembourg residents for tax purposes can benefit from the ASRD deduction on the same terms. To qualify, you must generally earn at least 90% of your worldwide income in Luxembourg (French and German cross-border workers), or more than 50% of your professional income in Luxembourg (Belgian cross-border workers). Exact conditions depend on your country of residence and family situation — check with the ACD or a tax adviser.
Can I deduct ASRD for a rental property?
No. The exceptional single-premium uplift is strictly reserved for primary residences or the taxpayer’s business premises. For a buy-to-let investment, only the standard €672/person ceiling on periodic premiums applies. Claiming the uplift for a rental property may result in a tax reassessment.
How do I declare my single ASRD premium in my tax return?
Fill in the « Special Expenditure » section of your return (form 100F or via MyGuichet.lu), under section B.b for insurance premiums. Enter the premium amount paid, your age at subscription, and the number of children allocated to your ceiling. Attach the tax certificate from your insurer. See the declaration section above for full details.
What is the tax difference between a single premium and annual premiums?
Annual premiums offer a limited deduction (€672/person/year, shared ceiling), spread over the life of the loan. A single premium allows you to deduct a much larger amount in one year (up to €15,600 or more), but if you cancel within 5 years, a partial tax clawback may apply. The single premium is generally more advantageous if you are certain you will keep your primary residence for at least 5 years.
Can both spouses claim the child uplift for a single premium?
No. Under Article 111 LIR, each child may trigger only one ceiling uplift. For couples taking out two individual policies, you must decide which spouse claims the uplift for each child. However, each spouse does benefit from their own base ceiling (€6,000) and their own age-related additional uplift.
What happens if I exceed the €672 ceiling on periodic premiums?
If the total of your deductible premiums and interest charges exceeds €672 per person, only the portion within the ceiling will actually be deducted. The excess generates no tax benefit. Example: you are single and pay €450 car liability + €180 home liability + €200 annual ASRD = €830 in total. Only €672 will be deducted. In this case, opting for a single premium — with its separate and much higher ceiling — may be far more advantageous.
Can I deduct ASRD if I am self-employed or a liberal professional?
Yes, the self-employed and liberal professionals can deduct ASRD on the same terms as employees, whether for their primary residence or business premises. The exceptional single-premium uplift also applies to the acquisition or fitting-out of business premises. The same ceiling rules apply (€672/person for periodic premiums; age- and child-based uplift for single premiums).
How much tax can I save through the ASRD deduction?
The tax saving depends on your marginal tax rate. Example: you deduct €12,000 with a single premium. At a marginal rate of 35%, the saving is 12,000 × 35% = €4,200. At 42%, it reaches €5,040. For annual premiums within the €672 ceiling, the saving ranges from approximately €215 to €282 per year depending on your marginal rate. The higher your taxable income, the greater the tax advantage. Check the ACD tax scales to find your marginal rate.
Can the single-premium uplift be renewed?
Yes, the single-premium uplift is renewable every five years for the same property. In the event of a mortgage renegotiation or extension works, you can claim it again. However, if you have already used the uplift within the previous five years for the same property, the new ceiling will be reduced by the total uplifts already deducted during those five years. After a full five-year period, the ceiling is fully regenerated.