Luxembourg real estate capital gains: 2026 tax rules (LIR)
Understand the taxation of a real estate capital gain by holding period, property use and applicable tax regime.
01Speculation vs transfer regime
Luxembourg tax law distinguishes two regimes by holding period. If resale occurs within two years of acquisition, the gain is a speculation profit (Art. 99bis LIR): it is fully added to that year's taxable income and taxed at the progressive income tax rate (marginal up to 42% + 7 or 9% employment fund contribution, max effective around 45.78%).
Beyond two years' holding, the gain becomes a transfer profit (Art. 99ter LIR) under a much more favourable regime: only one quarter of the overall tax rate applies under article 102bis paragraph 1 LIR. For a taxpayer in the 42% marginal bracket, the effective rate on the gain falls to about 10.5%, after allowance.
02Computing the taxable gain
The gross gain is the difference between the disposal price (less selling costs such as agency commission) and the acquisition price increased by deed costs (duties, emoluments, mortgage) and durable improvement expenses (extensions, structural works, major energy renovation). Routine maintenance is not deductible.
For the transfer regime (≥ 2 years), the acquisition price and costs are revalued using the revaluation coefficient published annually by STATEC (Art. 102 LIR). For 2026, key coefficients are: 2.33 (2010 purchase), 2.07 (2015), 1.77 (2022), 1.52 (2025). A property bought for €400,000 in 2015 has a revalued price of about €828,000. The gross gain is then reduced by the decennial allowance and taxed at one quarter of the global rate.
03Allowances and exemptions
The decennial allowance under article 130 paragraph 4 LIR removes €50,000 from the taxable gain per person (€100,000 for a jointly taxed couple). It is rechargeable every ten years, allowing planning of disposals after reconstitution. The primary residence effectively and continuously occupied for the five years preceding disposal is fully exempt (Art. 102bis para. 3 LIR), with no price cap.
A tax deferral (reinvestment) is possible if sale proceeds are reinvested into a new owner-occupied primary residence within two years (Art. 102bis para. 2 LIR). For land, specific regimes exist (deferral on gift to a descendant). Gratuitous transfers (gift, inheritance) do not trigger taxation for the donor, but the beneficiary takes over the historical acquisition price for computing their own future gain.
04Worked examples
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| Buyer profile | Gross gain | After allowance | Tax due |
|---|---|---|---|
| Single, 1 disposal in 10 years | ≈ −€230,000 | €0 | €0 |
| Couple, 1 disposal in 10 years | ≈ −€230,000 | €0 | €0 |
| Single, multiple disposals | €150,000 | €100,000 | ≈ €10,500 |
| Couple, multiple disposals | €150,000 | €50,000 | ≈ €5,250 |
| Speculation < 2 years (couple) | €150,000 | €150,000 | ≈ €68,700 |
Calculate your taxable capital gain case by case
Our calculator applies the right regime by holding period, the STATEC coefficient for your acquisition year, the decennial allowance per your situation and one quarter of the global rate.
Run the simulationFrequently asked questions
Short answers to the most common questions on this topic.
What is the capital gains tax rate on real estate in Luxembourg?
Within 2 years (speculation), progressive income tax up to about 45.78% effective. Beyond 2 years (transfer), one quarter of the global rate, typically 10 to 11% depending on bracket, after the decennial allowance.
Is the sale of my primary residence taxable?
No, provided you have effectively and continuously occupied it as your primary residence for the 5 years preceding the disposal. The gain is fully exempt (Art. 102bis para. 3 LIR), with no sale price cap.
How does the decennial allowance work?
Every taxpayer is granted €50,000 (€100,000 for a jointly taxed couple) off the taxable gain, rechargeable every ten years. If you dispose of two properties in the same decade, the allowance applies only once.
How is the revaluation coefficient calculated?
It is published annually by STATEC under article 102 LIR and reflects the construction price index since the acquisition year. For 2026: 2.33 (2010 purchase), 2.07 (2015), 1.77 (2022), 1.52 (2025), 1.48 (2026).
Are acquisition costs included in the calculation?
Yes. Registration duties, notary emoluments, mortgage costs of the acquisition deed and durable improvement expenses (extensions, major renovation, major energy upgrades) are added to the purchase price before revaluation. Routine maintenance and decoration are not deductible.
What about gifts or inheritance?
A gift or inheritance does not trigger capital gains tax for the donor or deceased (Art. 99bis para. 4 LIR). The beneficiary takes over the historical acquisition price and original acquisition date when computing their own future gain, which can lead to significant latent gains.
Official sources
Statutes, circulars and publications consulted for this guide.
- Modified law of 4 December 1967 on income tax (LIR)Legilux · 1967
- Revaluation coefficients — STATEC scaleDirect Tax Administration (ACD)
- Real estate capital gains — explanatory guideGuichet.lu
- Construction price indexSTATEC
- Article 99bis LIR — speculation profitLegilux
- Article 102bis LIR — quarter of global rateLegilux
Related tools
Complete your analysis with these other tevaxia tools.
Speculation or transfer profit by holding period, allowance, STATEC coefficient.
Cash-flow projection and resale value to anticipate taxation.
Track your properties and plan disposals over a 10-year horizon.
Compute the increased acquisition price serving as the gain's base.
Related articles
Continue reading with these complementary guides.
Registration duties, transcription, notary fees and mortgage costs explained in detail.
Tax credit on registration duties for first-time primary residence acquisition.
Valuation methods (comparison, capitalisation, DCF) and valuation criteria in Luxembourg.