Law published (Bill 6983) | KPMG | LU

Law published (Bill 6983): 1/4 global tax rate for real estate capital gains (99ter - 131§1d LIR)

Law published (Bill 6983)


Associate Partner

KPMG in Luxembourg


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Luxembourg Tax News 2016-16

As announced by the Luxembourg government earlier this year (see our previous flash Alert and Newsletter), the reduction of the tax rate on gains realized from the disposal of certain real estate owned by private individuals is now in force as of 1 July 2016.

Under the tax rules prior to the introduction of this new measure, capital gains (net income) in relation to the sale of real estate being a secondary home or investment land / property (i.e. not the taxpayer’s main residence) and held by the taxpayer for more than 2 years were taxed at 1/2 of the taxpayer’s global tax rate as extraordinary income. For a limited time from 1 July 2016 to 31 December 2017 (inclusive), the taxation of such gains realized during this period will be reduced to ¼ of the global tax rate of the taxpayer.

The Luxembourg tax authorities are anticipating that this measure will increase the number of real estate properties to be sold on the market in order to encourage the supply of land and homes in Luxembourg.

Law published (Bill 6964): joint notification in case of joint taxation (§91, al.1 AO)

This new law allows the Luxembourg tax authorities to issue only one notification in case of joint taxation of spouses/registered partners whereas previously two separate notifications were issued for each spouse/partner. Therefore, from a legal point of view, the joint notification to the recipients of a decision (e.g. issuance of a tax assessment), constitutes a notification in respect of both spouses/registered partners concerned. Individual notification of a joint decision may still be possible, however, it should be expressly requested by one of the spouses/registered partners filing jointly.

The aim of this new measure is to reduce the administrative costs of the Luxembourg tax authorities, as well as to reduce the formalities in terms of liability notification, especially for the issuance of tax assessments.


The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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