Draft Law nr 8343, filed by the new government at the end of November, proposes a serie of positive measures aimed at maintaining household purchasing power and boosting the property market in the Grand Duchy of Luxembourg.

Here are just a few of the measures to look forward to at the end of the year:


I. A tax cut for everyone!

The first piece of good news is that the personal income tax scale should be adjusted by 4 index brackets (instead of the 2.5 brackets already decided), representing an annual gain of between EUR 448 and EUR 2,189 according to the Government!

If you are a young worker, the Government has also thought of you, since a tax allowance will be introduced for those entering working life and a tax exemption is envisaged for bonuses paid by their employer for the purpose of renting a home.


II. Tax breaks for housing!

Property investors will not be outdone, as the rate and duration of accelerated depreciation for rental properties will be increased.

In addition, the tax rate of capital gains on the property sale will be reduced, to encourage owners to sell more.

Another tax gift for buyers this time is the "Bëllegen Akt" tax credit, which will be increased and extended to investment in rental property. As a reminder, this allowance on registration duties is currently limited to EUR 30,000 per purchaser.

Finally, the amount of deductible interest charges will also be increased to reduce the burden of loan repayments.


III. What about companies in this draft law?

In order to support companies that invest in sustainable and digital transition as well as in research and development, the tax credits system (LIR 152bis) will be supplemented.

The Government will also be looking at ways of clarifying and simplifying the tax treatment of benefits in kind granted by companies to their employees.


We will be sure to get back to you with details of all the measures once the Draft Law has been passed.

If you have any questions, please do not hesitate to contact us: In Extenso Belux