How do you get 3% VAT on renovation works in Luxembourg in 2026?
By Yacine Sahnoune, founder of renov.lu
In Luxembourg, renovation works on a home used as a main residence are invoiced at 3% VAT instead of 17%, provided the dwelling is at least 10 years old when the works start. The tax benefit is capped at €50,000 per dwelling (rule in force on 25 September 2026; the increase to €100,000 announced on 8 June 2026 has not been adopted). To be invoiced at 3% straight away, the contractor files an approval request before the works, which you countersign; otherwise you claim a refund.
- Rate: 3% instead of 17%, a 14-point difference on the pre-VAT amount of eligible works
- Age of the dwelling: at least 10 years when works start, or works completed within 5 years of purchase — neither « 2 years » nor « 20 years »
- Cap: €50,000 of tax benefit per dwelling over its whole life, i.e. roughly €357,000 of works excluding VAT
- Direct application: approval requested by the contractor before the works and countersigned by the client, for a quote of at least €3,000 excluding VAT
- Refund: over €3,000 excluding VAT of invoices covering at least 6 months, each invoice above €1,250 excluding VAT, within 5 years
- Commitment: main residence for 2 years from 1 January following completion of the works
Get your works priced at the right VAT rate
Describe your project: we pass your request to contractors established in Luxembourg. Ask them for a quote that separates the 3% and 17% items and comes with the approval request.
Conditions for the 3% VAT rate
The 3% rate applies when four conditions are met: a dwelling, used as a main residence, at least 10 years old in the case of a renovation, and eligible works carried out by a business, up to €50,000 of benefit per dwelling. The rules are set by the amended Grand-Ducal Regulation of 30 July 2002 and applied by the Registration Duties, Estates and VAT Authority (AED).
| Condition | What the rule says | Common cases |
|---|---|---|
| A dwelling | House or flat that can be lived in as a main home, including the garage, cellar and indoor common parts attached to it | Home and office combined: 3% on everything if living space exceeds 3/4 of the floor area, otherwise pro rata |
| Main residence | Direct (you live there) or indirect (a tenant has their main residence there); indirect use only qualifies for renovation | Second home or holiday let: 17% |
| Age of the dwelling | At least 10 years when the works start; substantial works are carried out within 2 years of starting, and several 2-year periods may follow one another | Recent purchase: works carried out on acquisition and completed within 5 years of buying qualify, whatever the age of the dwelling |
| Eligible works | Items on the official list, supplied and fitted by a business; other items stay at 17% | DIY works: building materials go through the refund procedure |
The 2-year condition is a French rule and does not exist in Luxembourg. The 20-year threshold is the old Luxembourg rule, lowered to 10 years on 1 January 2021 by the Grand-Ducal Regulation of 19 December 2020. A few older official documents still say « twenty years »: the updated guichet.lu page is the reference.
New build, extension, conversion into housing: these count as « creating » a dwelling, at 3% with no age condition if the owner lives there (creating a dwelling for letting has been excluded since 1 January 2015). See also construction grants in Luxembourg.
Works at 3% and works at 17%
Almost everything that forms part of the building is at 3%: structural work, roof, façades, windows, heating, electrics, sanitary ware, floor and wall coverings and painting. Furniture (including fitted kitchens), special technical equipment, air conditioning, outdoor landscaping and professional fees stay at 17%. The official list is exhaustive: any item not on it is invoiced at 17%.
| Invoiced at 3% (official list) | Invoiced at 17% |
|---|---|
| Excavation, load-bearing elements, weatherproof shell, waterproofing and screeds, façades, plastering | Furniture and fittings, including fitted kitchens (heating stoves are the exception) |
| Stairs and banisters, fixed ceilings and partitions, sheet-metal work, building ironmongery | Interior joinery other than stairs, banisters, doors and window sills (built-in cupboards, panelling) |
| Doors, windows, glazed roofs and conservatories, with their frames | Special technical equipment: alarm, home automation, IT equipment |
| Pipes and ducts built into walls, floors or ground, and connection to public networks | Air conditioning and « wellness » equipment (sauna, spa) — see installed air conditioning cost |
| Heating installation, controlled ventilation (MVHR), solar thermal collectors | Outdoor landscaping, except the direct access path to the home and garage |
| Electrical installation, lifts and goods lifts | Notary, architect and consulting engineer fees |
| Sanitary equipment, except furniture and mirrors | Indoor blinds and curtains |
| Wall, floor and ceiling coverings; interior and exterior painting, wallpaper | Any item missing from the official list |
Two rooms account for most mistakes. In a kitchen, work on the building itself (concealed plumbing, electrics, tiling, painting) is at 3%, but the units, worktop and appliances of the fitted kitchen stay at 17%: details on our page on kitchen renovation costs. In a bathroom, the shower, WC, washbasin, tiling and plumbing are at 3%, the vanity unit and mirror at 17%: see bathroom renovation costs.
The €50,000 cap: what it covers
The tax benefit — the difference between 17% and 3% — is capped at €50,000 per dwelling created or renovated, across all procedures and all projects, over the dwelling’s whole life. As the benefit equals 14% of the pre-VAT amount, the cap is reached at around €357,000 of eligible works excluding VAT (50,000 ÷ 0.14, an indicative calculation).
| Eligible works excl. VAT | VAT at 17% | VAT at 3% | Benefit used |
|---|---|---|---|
| €20,000 | €3,400 | €600 | €2,800 |
| €50,000 | €8,500 | €1,500 | €7,000 |
| €150,000 | €25,500 | €4,500 | €21,000 |
| €357,000 | €60,690 | €10,710 | €49,980 (cap almost reached) |
The remaining balance can be checked online with the « Information du solde restant TVA Logement » procedure in your private MyGuichet.lu space. Check it before buying a home the seller has already renovated: the cap follows the dwelling, not its owner.
3% VAT and Klimabonus: what can be combined
3% VAT can be combined with the Klimabonus Wunnen grants, the Klimaprêt loan subsidy and municipal grants. The 2026 Klimabonus is a flat amount (per m² or per installation) whose caps are based on the cost excluding VAT: the VAT rate does not change the grant, it lowers what you pay out of pocket. For example, an air-to-water heat pump replacing an oil boiler in a house receives €10,000 of Klimabonus (€12,000 if ordered before 30 June 2027), and its installation is invoiced at 3%. Details: Klimabonus energy renovation grants. The full path, from VAT approval to Klimabonus payment, is summarised in our guide renovating your home in Luxembourg: steps, budget and grants.
Direct application: AED approval before the works
To invoice at 3% from the first invoice, the contractor must obtain AED approval before the works begin. The contractor files the request for the specific works it describes, and you countersign it. Without approval, the contractor has to invoice at 17% and you go through the refund procedure.
- First: a detailed quote of at least €3,000 excluding VAT, separating the 3% and 17% items, and the approval request filled in by the contractor and countersigned by you (see the form below).
- Decision: the approval is sent by post to both the owner and the contractor. No official processing time is published: have the request filed as soon as the quote is signed.
- Then: the contractor invoices the approved items at 3% and submits every quarter, before the 15th, the list of invoices issued at 3%.
The approval covers the works described by the contractor who requests it. If a mason, an electrician and a tiler work on the project, each files its own request. A change in scope or amount is reported with the « Demande de modification / annulation / clôture d’un agrément ».
Filling in the direct application form, step by step
The official form is called « Demande d’application directe du taux de 3 % TVA (Agrément) »; the German version is the « Antrag für die direkte Anwendung des Mehrwertsteuersatzes von 3 % ». It can be downloaded from guichet.lu (TVA-Logement section) or completed online by the contractor; there is no English version. Here is what each part asks for.
The contractor’s details
Name or company name and Luxembourg VAT identification number (LU…). This is the number that will appear on the 3% invoices.
Your details as owner
Surname, first name, national identification number (matricule) and official address. For joint owners, each owner concerned must be identifiable.
The dwelling and its use
Address and land registry reference of the dwelling (shown on your notarial deed), then who lives there: you, or a tenant as their main home. If the dwelling to be renovated is not occupied by a tenant at the time of the request, attach the « Déclaration et engagement » form.
The works
A short description of the works and their estimated cost, with a full copy of the quote (at least €3,000 excluding VAT). For a new build, add a copy of the notarial deed (sale or off-plan sale).
Signatures
The contractor signs and you countersign. For online filing, you sign instead the « Mandat pour le dépôt électronique de la demande d’application du taux super-réduit », which you can also create from your private MyGuichet.lu space.
Sending it
AED, Bureau d’imposition Luxembourg 12 – Service Agrément, 308, route d’Esch, L-1471 Luxembourg (postal address: B.P. 31, L-2010 Luxembourg; phone 247-80707), at the counter, or through the contractor’s online procedure on MyGuichet.lu (LuxTrust or electronic identity card).
That is the AED’s rule. Before sending, check four points: the owner’s national identification number, the land registry reference, a quote detailed item by item (a « renovation, lump sum » line is not enough) and your countersignature. A returned file means works that may start at 17%.
The list of invoices: which statement, filled in by whom?
There are two « relevés des factures » (in German « Liste der Rechnungen ») that should not be confused: the one the owner attaches to a refund request, and the one the contractor submits every quarter for invoices issued at 3% under an approval.
| Document (FR / DE) | Filled in by | When | Content and submission |
|---|---|---|---|
| Relevé des factures – ANNEXE Remboursement TVA Liste der Rechnungen – ANHANG Mehrwertsteuerrückerstattung |
The owner | With the refund request | Lists each invoice for the period; attach the originals, which state the location of the dwelling, and proof of payment |
| Relevé des factures à 3 % – ANNEXE Agrément TVA Liste der Rechnungen zu 3 % – ANHANG Genehmigung TVA |
The contractor | Every calendar quarter, before the 15th | Invoices issued at 3% in the previous quarter under the approval; Excel template provided by the AED, converted to XML and filed on MyGuichet.lu |
As a client, you have nothing to file in the second case: simply check that your invoices apply 3% to the approved items and 17% to the rest, and keep them with the approval.
Refund: recovering the difference after the works
If the works were invoiced at 17% — no approval, a quote under €3,000 excluding VAT, materials bought for DIY works — the owner asks the AED to refund the difference down to the 3% rate, i.e. 14% of the pre-VAT amount. Conditions:
- a request for more than €3,000 excluding VAT in total, covering at least 6 months (at least 6 months between two requests);
- each invoice above €1,250 excluding VAT;
- a request filed within 5 years from 31 December of the year to which the VAT relates;
- for a foreign business: a Luxembourg VAT number and an invoice with Luxembourg VAT; Belgian, French or German VAT is not refunded.
The request is made online in your private MyGuichet.lu space, or by post with the « Demande de remboursement TVA – Logement » form (in German « Antrag auf Erstattung der Mehrwertsteuer »). Attach the list of invoices, the originals, proof of payment, your IBAN and a written statement that the home is your main residence, with an undertaking to report any change within a month; for a new home you bought, a copy of the notarial deed. The AED replies by post and pays into the account given; a refusal can be contested in writing within 3 months with the tax office.
Worked examples: what the 3% rate changes on an invoice
6 m² bathroom in a 1998 flat lived in by its owner, €18,000 excluding VAT:
| Item | Excl. VAT | Rate | VAT |
|---|---|---|---|
| Demolition, plumbing, electrics, ventilation | €6,500 | 3% | €195 |
| Waterproofing, tiling, painting | €5,500 | 3% | €165 |
| Shower, wall-hung WC, washbasin, taps | €4,000 | 3% | €120 |
| Vanity unit and mirror | €2,000 | 17% | €340 |
| Total | €18,000 | — | €820 instead of €3,060: a saving of €2,240 |
1978 house, 150 m², full renovation: €180,000 excluding VAT, including €150,000 of eligible works, €18,000 for the fitted kitchen and €12,000 of architect fees at 17%. VAT due: €4,500 + €5,100 = €9,600, instead of €30,600 with everything at 17%. The €21,000 saving leaves €29,000 of benefit available for future works on this dwelling. To size an overall budget, see our page on renovation cost per m²; for the steps of such a project, our guide to full home renovation in Luxembourg.
Getting your works priced at the right rate
A good quote separates the 3% and 17% items, shows the contractor’s Luxembourg VAT number and comes with the approval request. Describe your project on our renovation works quote page: businesses established in Luxembourg, with a verified business permit, reply with comparable offers, free of charge and without obligation. For a first budget, use the renovation cost simulator or the index of prices by trade.
Frequently asked questions about 3% VAT in Luxembourg
Which form do you need for 3% VAT?
To be invoiced at 3% straight away, the contractor fills in the “Demande d’application directe du taux de 3 % TVA (Agrément)” (there is no English version), you countersign it (or give the contractor a mandate in MyGuichet.lu) and the contractor files it with the AED before the works start. Without this approval, the works are invoiced at 17% and you then claim back the difference with the “Demande de remboursement TVA – Logement”, on paper or in MyGuichet.lu.
Does 3% VAT apply if I rent out my home?
Yes for a renovation, if the tenant has their main residence there: this is indirect use. No for creating a dwelling intended for letting, which has been excluded since 1 January 2015. A second home or a holiday let stays at 17%.
My home is 8 years old: can I still get 3% VAT?
Not for a renovation, unless you have just bought it: works carried out on acquisition and completed within 5 years of the purchase qualify whatever the age of the dwelling. An extension counts as creating a dwelling and benefits from 3% with no age condition if you live there.
How long does the AED take to issue the approval?
No official processing time is published. The decision arrives by post, to both the owner and the contractor. Have the request filed as soon as the quote is signed, with a complete file, and do not let any works be invoiced before the approval arrives.
Are solar panels invoiced at 3% VAT?
Yes. Since 1 January 2023, the supply and installation of photovoltaic panels on a private home have been invoiced directly at 3%, with no approval and outside the €50,000 cap. For a storage battery, have the rate confirmed by the AED.
How can I check the remaining balance of my €50,000 cap?
With the « Information du solde restant TVA Logement » procedure in your private MyGuichet.lu space. The cap is attached to the dwelling: a home already renovated by a previous owner may have a reduced balance.
What happens if I sell the home within 2 years of the works?
The sale must be reported in writing to the AED within a month. If the home stops being a main residence during the 2 years following 1 January of the year after completion, the tax benefit must be repaid with statutory interest by whoever received it.
Is the housing VAT cap going up to €100,000?
Not yet. The tripartite agreement of 8 June 2026 announces it, subject to European approval, but no legislation had been adopted by September 2026. The applicable cap remains €50,000 per dwelling.
Quotes that apply the right rate
Compare offers from businesses established in Luxembourg, with VAT split between 3% and 17%.