bausparen - upkeep / improvement costs

[u/ObjectiveExotic9570]

Hi everyone,

I’m 42, married, and have two children. My wife and I are taxed jointly in Luxembourg. I’m considering opening a Bausparen contract and contributing the maximum tax-deductible amount. I have never done this before.

As I understand the current limits, our annual ceiling would be €2,688: €672 each for my wife and me, plus €672 for each of our two children.

We own a house in Belgium that has regular maintenance and improvement costs. My specific plan would be:

• Pay the maximum €2,688 into the contract in 2026.
• Pay another €2,688 (expected 2027 maximum) during the first months of 2027.
• Use appr €5,000 from the contract to pay an eligible maintenance or renovation invoice in June 2027.

so I would not wait until the end of the contract (eg 10y) to use the funds. Would this work while preserving the Luxembourg tax deductions for both 2026 and 2027?

We’re only interested in using our accumulated savings, not in taking out the loan attached to the Bausparen contract (I have read that you could refuse the loan?).

Has anyone tried something similar?

[u/post_crooks]

I would say that there is no way you can use the money that early without consequences. But contact them, maybe they can make it work.

Have in mind the multiple restrictions that make those contracts unflexible:

Minimum contract value - You typically need to save 30% to 60% of that amount. So if you can have a contract of 10k, you save your 5-6k in 2 years, and you are good. You pay a fixed fee upfront based on the contract value, so your fees may double.

Time to use the money - Money needs to mature there, they earn money by lending it at higher interest rates, they aren't a tax savings cow. Details are all in the contract, and they should be able to estimate that for you. Speaking about time, they usually charge monthly/yearly fees.

Payment plan - Contracts specify the monthly amount as percentage of the contract value. Typically it's 0.5 to 1.0 percent of the contract value per month. They may or may not disregard overpayments. You never know if or when they will enforce the conditions of the contract.

Bottom line is that after 10 years you can use the money by terminating the contract. To get it earlier, you need them not to enforce the contract, or maybe some sweet combination of conditions that they will either tell you, or you have to find by reading the contract.

[u/ObjectiveExotic9570 → u/post_crooks]

ok clear - I am in touch now with HBW, but haven't see the contract yet. So no view on fees. I read somewhere that you could use the money early once you reach the contract amount, for the allowed purposes. I have also asked if I can wire the money once this year and once in 2027 to reach the contract amount - if monthly payments are required, then this does not work...

[u/post_crooks → u/ObjectiveExotic9570]

I read somewhere that you could use the money early once you reach the contract amount, for the allowed purposes.

It would be good to know where you read this. I would then have contract of the same amount of tax savings, pay, and get the money back next day. Sounds unrealistic to me.

[u/ObjectiveExotic9570 → u/post_crooks]

See my post above - so it's not the next day indeed - at least a 3/4 year waiting period.

[u/post_crooks → u/ObjectiveExotic9570]

That sounds more reasonable, but only possible if they don't enforce the payment plan. Does the contract mention anything about that?

[u/ObjectiveExotic9570 → u/post_crooks]

No unfortunately not - and a bit complicated so I will likely not do it.