Publié le 08 February 2024
Real estate: what new measures has the government announced?
Discover the new government fiscal measures for the real estate sector in 2024 on taxx.lu, including tax credits and rate adjustments.
The coalition agreement, due to be presented to the Chamber of Deputies next week, has been revealed ahead of publication. Housing has been named as the government's number one priority. Here is a summary of the main tax measures introduced by the new government, for people wishing to buy their principal residence and for investors.
Buying a main residence
The increase of the tax credit "Bëllegen Akt" supports people who want to buy their main residence. The amount has been increased from €30,000 to €40,000. This tax credit is intended to finance the notary's fees when buying a real estate property.
The maximum deductions for interest on debts relating to principal residences are once again being increased from the 2024 tax year:
- 3,000 to 4,000 euros for the year of occupation and the following 5 years,
- 2,250 to 3,000 euros for the following 5 years (6-10 years),
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1,500 to 2,000 euros after 10 years.
Investing in property
The "Bëllegen Akt" now also applies to investors. With the aim of supporting the real estate sector, a tax credit of €20,000 will also be available for people who invest in a property that will then be let out. However, this measure only applies to properties purchased VEFA (vente en l'état futur d'achèvement - sale in future state of completion) and which will be let out for at least 2 years. This measure applies only to properties purchased in 2024.
In addition, for properties sold in 2024, capital gains will no longer be taxed at the standard rate but at a quarter of the overall rate. However, the period between the acquisition of the property and the sale must be more than 2 years. For property sold from 2025 onwards, capital gains will be taxed at half the overall rate for property held for more than 5 years.
Property acquired in 2024 for construction with the intention of letting will benefit from a depreciation rate of 6% for 6 years, up to a maximum depreciation of 250,000 euros per year.
From the 2024 tax year, income from social rental management will be exempt at a rate of 90%, compared to 75% previously.
These measures are designed to support the real estate sector, which has been struggling in recent years since the rise in interest rates. However, it is important to reiterate that these measures are applicable for the year or from the year 2024. So you'll have to wait a bit longer to see the changes on your tax returns.
