Real estate taxes in Luxembourg

Taxable property categories

When it comes to taxable property categories, they are divided based on their nature and use. Residential properties are generally assessed differently than commercial properties or agricultural land. Each category has its own criteria for taxation, and the applicable tax rates may also vary.

Mostly, the real estate owners in Luxembourg are falling into the second category. Depending on the commune, category B, therefore, includes 6 classes of property:

1. commercial buildings;
2. mixed-use buildings (commercial & residential);
3. buildings for other purposes;
4. houses and apartment buildings;
5. properties not built on except residential building plots;
6. residential building plots.

What property is not taxable

In an effort to promote public welfare and facilitate essential services, the government has defined certain categories of property that are exempt from taxation. These exemptions cover a range of valuable assets, including:

• state and municipal property used for public services,
• buildings owned by charitable organizations,
• medical facilities operated by hospitals and religious orders.

Interesting fact. In addition, infrastructure assets such as engineering works, railway lines and roads, as well as administrative property belonging to the CFL, have been designated as eligible for tax relief.

How to calculate your real estate taxes

In Luxembourg, the calculation of property tax involves several factors. The specific method may vary depending on the type of property and the commune where it is located.

Example

let's say a property has a cadastral income of 10,000 euros, and the commune where it is located has set a property tax rate of 5%. 

The property tax liability would be 10,000 euros multiplied by 5%, resulting in an annual property tax of 500 euros.

There may be variations and additional factors involved in the property tax calculation for specific types of properties or situations. For instance, certain exemptions or deductions might be applicable, such as exemptions for first-time homebuyers or deductions for energy-efficient renovations. These factors can influence the final amount of property tax payable.

Also, currently, there is a new reform underway, that must come live in 2026. It will change the model of land evaluation and ease the process somehow. A special simulation, that concerns Luxembourg citizens, is already available for this new model. If you want some forecasts, you can check out the calculator.

When to pay real estate taxes

The payment frequency for taxes depends on the tax amount owed.

• If the tax is below 55 euros, the full annual amount must be paid by November 15.
• For sums ranging from 55 to 110 euros, two payment dates are applicable — May 15 and November 15, with each payment being half of the total annual amount.
• If the tax exceeds 110 euros, there are four payment dates — February 15, May 15, August 15, and November 15, with each payment being a quarter of the annual amount.

Property transfer tax in Luxembourg

Property transfer tax, also known as stamp duty, is a tax imposed when ownership of a property is transferred from one party to another. The purpose of this tax is to generate revenue for the government and cover administrative costs associated with property transactions, such as the registration of ownership changes.

There are two factors, that matter in the case of property transfer taxation.

In certain cases, when an individual transfers his or her property to the State, a municipality, or an association of municipalities, the length of ownership becomes irrelevant. This transfer is covered by the Housing Pact and is exempt from income tax.

When calculating transfer tax, it typically involves applying a percentage to the property's value. The real estate transfer tax in Luxembourg is 7% of the value.

Luxembourg property income taxation

Property income tax is mostly relevant to property investors and landlords in Luxembourg. It is a tax on the income generated from owning and renting out properties. Taxable income from property includes

• rental income, which is the amount received from tenants, and
• capital gains from the sale of a property, which refers to the profits made from selling a property at a higher price than its purchase price.

The applicable tax rates for property income in Luxembourg depend on various factors, including the type of property and the taxpayer's overall income. But as a rule, the property income is taxed at a usual progressive rate.

Deductions or allowances may be available to offset certain property ownership and management expenses, such as property maintenance costs or mortgage interest payments. These deductions can reduce the taxable income and, ultimately, the tax liability.

How to file property income taxes for residents

Property income tax in Luxembourg has reporting requirements and deadlines. Taxpayers need to declare their property income and file the appropriate tax forms within the specified timeframe, which can vary based on individual circumstances.

When the rented property is solely owned by the residenttaxpayer or jointly owned with a spouse/partner or a minor child, the taxpayer is required to fill out Form 190, specifically designed for reporting income from the rental of built properties.

Application form 190

PDF

Form 190 consists of two pages and includes information about the owner, their income on the property, and deductible expenses. You can download and use the 190 Form in French with the link below.

FR

Form 190 consists of two pages and includes information about the owner, their income on the property, and deductible expenses. You can download and use the 190 Form in French with the link below.

Download

If resident taxpayers co-own a rental property, they must complete two forms to declare their rental income. The first form is Form 210, which deals specifically with rental income from co-owned buildings. This form allows taxpayers to provide detailed information about their rental income and expenses in relation to the co-owned property.

In addition, they must also complete Form 200, known as the Declaration for Joint Reporting of Income from Joint Business Enterprises and Co-owned Properties. This form allows taxpayers to jointly report their income from the co-owned property and any other joint business ventures they may have.

How to file property income taxes for non-residents

Non-resident property owners or investors may have additional considerations to take into account. A non-resident taxpayer who owns a rental property in Luxembourg is generally required to declare the rental income (which is not exempt) on the income tax return form.

However, if a non-resident taxpayer owns a rental property abroad and opts to be treated as a resident taxpayer when filing his income tax return, he must declare the rental income (which is exempt) from the foreign property.

There are no further differences between residents and non-residents:

• If the property is solely owned or owned jointly with a close family member — fill out Form 190.
• If the property which generates income is co-owned — fill out Forms 200 and 210.