Tax deduction – Luxembourg and Sweden

Luxembourg, Luxembourg Climate sustainability, Financial incentives


Tax incentives can be used to steer investment in energy-efficiency measures. The reduction of VAT or tax deductions on renovation activities, mainly on labour costs, has often created win-win-situations for the environment, economic growth, and created/assured workplaces.

Luxembourg has introduced a reduced tax of 3 per cent on all construction and renovation of housing, provided the property is intended as a main residence.[1] The total amount of the VAT benefit cannot exceed EUR 50,000 per built and/or renovated residence. In Sweden, the system is called “ROT-avdrag” (repairs, conversion, and extension – deduction)[2]. Repair, maintenance, conversions and extensions are counted as ROT work, and are tax deductible up to 50,000 Swedish croons (approximately EUR 5,000) per person per household per year.



More information

[1], “Applying for VAT rebate or direct application of the super-reduced tax rate”. Available at (accessed on 10 October2020).

[2] Skatteverket, “ROT and RUT work”.  Available at (accessed on 10 October 2020).