On 9 October 2024, Luxembourg’s Finance Minister submitted draft budget law No. 8444 to the Luxembourg Parliament (the “Draft Budget Law”). The main tax measure is the reduction by fifty percent of the taxable basis for registration and transcription duties applicable to real estate acquisitions between 1st October 2024 and 30 June 2025.
Registration duties for real estate acquisitions
The key features of the measure are as follows:
- Tax base reduction: The registration and transcription duties rates remain untouched, but the tax base is reduced by fifty percent.
- Acquisition date: The notarial deed must have been signed between 1 October 2024 and 30 June 2025.
- Use of the real estate: The acquired real estate must be acquired either to be used as main residence of the buyer or to be rented as housing.
- Delay to rent or occupy as main residence after the acquisition: The rental for housing purposes or the use as main residence must take place within 2 years of the acquisition. The delay is extended to 4 years where the construction is not finished upon acquisition.
- Minimum rental or occupation period is of 2 years to keep the benefits of the reduction.
- Form of the request: The reduction must be requested in the notarial deed. Where the notarial deed has been signed between the 1 October and the entry into force of the law, a written request must be addressed to the tax authorities and a written commitment to meet the requirements must be signed in presence of the tax officer.
- Other tax credits already available against real estate registration duties will remain applicable and apply cumulatively.
Other measures
The Draft Budget Law also foresees an increase of the maximum amount of the CO2 tax credit applicable to self-employed, employees and pensioners from 168 to 192 euros.
Through this Draft Budget Law, the government continues the implementation of its 2023-2028 program which already translated earlier this year into specific tax measures for the real estate sector (see our previous newsflash) and tax cuts for companies as well as individuals (see our previous newsflash).
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