Example 1:
Assumptions
A taxpayer, widowed, is the owner of a building, situated in Luxembourg and used for rental housing.
The property is part of taxpayer’s private assets and has the following characteristics:
- date of purchase: 2 January, 2005
- land purchase price: €100,000
- purchase price of the construction: €500,000
- completion date of the energy efficiency improvement measure: 15 March, 2021
- cost of the energy efficiency improvement measure (after deduction of the financial support referred to in article 4 of the law amended on 23 December, 2016): €50,000
Calculation of depreciation
The depreciation on the building for the 2022 taxation year is calculated as follows:
Conclusion
The taxpayer thus realises a net income under article 10, number 7 L.I.R. taxable in the Grand Duchy of Luxembourg and determined by taking into account normal depreciation of 2% for the original construction and accelerated depreciation of 6% pursuant to article 32 ter, paragraph 3 L.I.R. owing to an energy efficiency improvement measure completed at least 9 years previously at 01/01/2022 on a property used for rental housing.
Example 2:
Assumptions
A taxpayer, single, is the owner of a building, situated in Luxembourg and used for rental housing.
The property is part of taxpayer’s private assets and has the following characteristics:
- date of completion: 30 June, 1980
- date of purchase: 1 July, 2000
- land purchase price: €50,000
- purchase price of the construction: €300,000
Renovation work on this building is carried out during 2021:
- date of completion of the work: 31 December, 2021
- costs of investment: €200,000.
The costs of investment are broken down as follows:
- cost of investment relating to a sustainable energy efficiency improvement measure (after deduction of the financial support referred to in article 4 of the law amended on 23 December, 2016): €50,000
- costs of investment not relating to a sustainable energy efficiency improvement measure: €150,000.
Calculation of depreciation
The depreciation on the building for the 2022 taxation year is calculated as follows:
- (2% x 300,000) + (4% x 150,000) + (6% x 50,000)
➔ Total depreciation for 2022 of €15,000.
Conclusion
The taxpayer thus realises a net income under article 10, number 7 L.I.R. taxable in the Grand Duchy of Luxembourg and determined by taking into account normal depreciation of 2% for the original construction, accelerated depreciation of 4% for the renovation not linked to an improvement of the building’s energy efficiency and accelerated depreciation of 6% pursuant to article 32 ter, paragraph 3 L.I.R. owing to an energy efficiency improvement measure completed at least 9 years previously at 01/01/2022 on a property used for rental housing.
Example 3 :
Assumptions
A taxpayer, married, is the owner of a building, situated in the municipality of Rédange-sur-Attert and used for rental housing.
The property is part of the private assets belonging to the taxpayer and his spouse and has the following characteristics:
- date of completion: 30 June, 1970
- date of purchase: 1 July, 1998
- land purchase price: €30.000
- purchase price of the construction: €200.000
Renovation work on this building is carried out during 2010:
- date of completion of the work: 16 July, 2010
- costs of investment: €80,000.
The costs of investment are broken down as follows:
- costs of investment relating to a sustainable energy efficiency improvement measure: €60.000
- costs of investment not relating to a sustainable energy efficiency improvement measure: €20,000.
Calculation of depreciation
The depreciation on the building for the 2022 taxation year is calculated as follows:
- 2% x 280,000
➔ Total depreciation for 2022 of €5,600.
Conclusion
The taxpayer thus realises a net income under article 10, number 7 L.I.R. taxable in the Grand Duchy of Luxembourg and determined by taking into account normal depreciation of 2% for the original construction and the renovation work carried out in the course of 2010. The taxpayer and his spouse unfortunately are not able to benefit from the accelerated rate of depreciation of 6% on the renovation work relating to the improvement of the energy efficiency of the building given the condition of 9 years which cannot be fulfilled in this case.