Housing Tax Incentives in Luxembourg

Last Chance: Housing Tax Incentives in Luxembourg End in June 2025

The exceptional tax measures supporting housing construction in Luxembourg will end on June 30, 2025. To benefit from these advantages, you must act quickly: the preliminary sales agreement or reservation contract must be submitted to the Registration Administration (AED) by that date at the latest.

New flexibility for the notarial deed signing
A recent draft law allows buyers to sign the notarial deed up to September 30, 2025, provided the preliminary contract was submitted on time. This gives more time to finalize the purchase without losing tax benefits.

Which benefits are affected?

To better understand the advantages, here is a breakdown by stakeholder:

For Sellers:

• Capital gains taxed at only a quarter of the usual rate
  When selling a property, the capital gain is taxed at only a quarter of the usual rate (for example, a maximum of 10.25% instead of 21%).

• Exemption of capital gains when transferring to social rental management or energy-efficient buildings (A+ rating)
  Selling to social housing entities or highly energy-efficient buildings can make the capital gain tax-free.

For Buyers:

• Halving of the taxable base for registration and transcription fees
  This lowers the acquisition-related costs considerably.

For Investors:

• Accelerated depreciation at 6% per year over 6 years
  Investors can reduce their taxable income faster.

• Rental tax credit of €20,000 per individual
  This direct tax credit encourages investment in rental properties.

What remains unchanged?

The “Bëllegen Akt” tax credit for owner-occupied homes remains available at €40,000 even after June 30, 2025.

Conclusion

Only a few days remain to take advantage of these attractive tax incentives. Whether you want to sell, buy, or invest, now is the perfect time to realize your real estate plans.
Submit your preliminary contract by June 30, 2025, and complete the purchase by September 30, 2025, to secure these benefits!