On 31 January 2024, the Luxembourg government announced a series of tax measures to revive the construction and housing sector and facilitate access to housing while addressing the cyclical and structural housing problems. The measures also provide direct housing assistance for individuals and the construction industry.
The tax measures include:
- The capital gains tax rate for real estate sold in 2024 will be reduced to 25% of the standard rate. However, the granted property must be owned for at least two years. From 1 January 2025, half of the standard rate will apply if the property has been owned for at least five years.
- Housing constructed and approved for rental in 2024 will be subject to an accelerated depreciation rate of 6% over 6 years. The maximum annual cap will be EURO 250,000.
- Real estate transferred to social rental management organizations will be exempt from capital gains tax.
- Companies will be eligible for a 25% tax exemption on premiums paid for renting accommodation to employees aged up to 30 years. This exemption is capped at EURO 1,000 per month.
The tax measures will go into effect retroactively from 1 January 2024.
