What is the Schwäbisch Hall home loan?
The Schwäbisch Hall home loan combines a traditional home loan solution with a home buyers savings scheme. It applies to the financing of projects for your main residence in Luxembourg or in bordering regions. For example: purchase, renovation, construction or loan repayments.
What are the benefits of a Schwäbisch Hall home loan?
- You finance the purchase of your home,
- The interest debit and amounts saved are tax deductible,
- You know the fixed interest rate in advance for both your savings and home loan.
How does a Schwäbisch Hall home loan work?
Phase 1: the home savings scheme
First, you take out a bullet loan with BGL BNP Paribas(2).
At the same time, you pay a portion of your savings into a home buyers savings account. You deduct the amounts from your taxes*.
Thanks to the bullet loan system, during this initial period you only pay the loan interest and make no capital repayments.
At the end of this contract, your investment will help repay the first part of the bullet loan taken out with BGL BNP Paribas.
Phase 2 : the amortised
At the end of the home buyers savings contract, you’ll need to repay the second portion of the loan. At this point, you have two options:
Either take out an amortised loan with BGL BNP Paribas(2), under the applicable terms and conditions,
Or take out an amortised Schwäbisch Hall loan, at the guaranteed fixed rate at the time the home buyers savings scheme is set up.
This solution offers your security. Ideally, we’ll be able to offer you a more favourable interest rate. Otherwise, you have access to the interest rate initially negotiated with Schwäbisch Hall.
This means you can save for the future while financing your home today! Since the loan structure is different to a standard solution, this results in a cost difference.
However, it may be in your favour, depending on the tax allowances you may be entitled to. Potential tax allowances will depend on the number of people in your household and your individual situation.
An in-depth discussion with your advisor will help you find the best solution.
They’ll assess your project, needs and situation with you. They can offer you a personalised solution to finance your real estate project (2).
How much is tax deductible?
Since the 2017 tax reforms, tax allowances on home buyers savings accounts depend on taxpayer ages. Taxpayers aged under 40 benefit from a higher tax-deductible ceiling.
|18 to 40||(inclusive)*||41 and over*|
or in a civil partnership(3)
or in a civil partnership(3)
|Taxpayer||1 344 EUR||2 688 EUR||672 EUR||1 344 EUR|
|Taxpayer + 1 child||2 688 EUR||4 032 EUR||1 344EUR||2 016EUR|
|Taxpayer + 2 children||4 032EUR||5 376 EUR||2 016 EUR||2 688 EUR|
|Taxpayer + 3 children||5 376 EUR||6 720 EUR||2 688 EUR||3 360 EUR|
|etc (Per additional child)||+ 1 344 EUR||+ 1 344 EUR||+ 672 EUR||+ 672 EUR|
A home buyers savings account doesn’t necessarily need to be attached to a home loan! You can start building your savings to help you purchase your home later on, while already benefiting from tax breaks. Not only do you benefit from tax reductions – your savings are also guaranteed. What’s more, you receive interest income at a rate agreed on with our partner Schwäbisch Hall, when the savings scheme is set up.
Good to know
Under any real estate loan, debit interest is tax deductible.
* Tax deductibility varies based on the personal situation of each client and is subject to change.
(2) Offer subject to terms and conditions and approval of your application by the bank. Tax deductibility varies based on the personal situation of each client and is subject to change.
(3) Collectively taxable partners
(4) The children's bonus is granted for children for whom the taxpayer obtains a child tax allowance.
Tax treatment depends on the individual situation of each client and is subject to change at a later stage.
To take advantage of tax benefits, the proceeds of the home buyers savings scheme must be allocated to the holder’s main residence in Luxembourg or the Greater Region. The savings account can be set up for the:
- Construction or acquisition of an apartment or house,
- Renovation of an apartment or house,
- Purchase of land for construction of an apartment or house,
- Or even the repayment of home loans taken out for these purposes
The contract cannot be terminated for the first 10 years (except in the event of death or disability) without tax penalties. After 10 years, no more corrective taxation for the years in question.
For the creation of home buyers savings accounts, BGL BNP Paribas has chosen to work with savings bank Schwäbisch Hall.
This is where the home buyers savings account will be opened. Throughout the process, BGL BNP Paribas and Schwäbisch Hall advisors will assist you in your real estate project.
A bullet loan is a loan under which only the interest is repaid during the loan term. The capital amount is not amortised and is repaid in a single instalment upon maturity. The interest paid is higher than under a traditional loan, however in Luxembourg it is tax deductible.
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