Luxembourg’s Parliament approved the 2025 budget law on 19 December 2024.

It introduces a 50% reduction in the taxable base for registration and transcription duties on real estate acquisitions, in addition to the existing EUR 40,000 “Bëllegen Akt” tax credit for primary residence purchases. These provisions apply to properties purchased between 1 October 2024, and 30 June 2025, for primary residences or qualifying rental properties.

A new bill was also submitted to extend temporary 2024 housing measures through June 2025. These include increased tax credits for primary and investment properties, reduced capital gains tax rates, exemptions for social housing investments, and accelerated amortisation for off-plan purchases.

The amended Pillar Two Law was enacted, incorporating OECD guidelines on minimum taxation with retroactive application to financial years starting after 31 December 2023.

Parliament also approved a VAT reform, aligning rules with European Directives. Luxembourg’s Parliament approved the VAT bill of law (bill n°8406). The changes will affect small enterprises, digital events, and the art sector starting 1 January 2025.

Earlier, The Luxembourg Chamber of Deputies reviewed Bill 8406, proposing amendments to the law of 12 February 1979 on value added tax (VAT), aligning with Council Directive (EU) 2020/285 of 18 February 2020, Council Directive (EU) 2022/542, and the special scheme for small enterprises and Regulation (EU) 904/2010.

The Luxembourg government published a revised draft law on 31 October 2024 amending the Global Minimum Taxation Law, commonly referred to as the Pillar Two law.