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Property tax

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Property tax is an impersonal tax, implemented by the communes, which is levied on all property, built on or otherwise, belonging to natural and legal persons, regardless of:

  • their ability to contribute (i.e. their ability to finance communal expenses);
  • the use made of these properties: business, private, mixed;
  • the means of finance used to acquire them: own funds or a loan.

Each year, owners receive a property tax assessment showing the amount to pay and the deadline to be met when paying the tax.

Who is concerned

All natural and legal persons owning a property in the Grand Duchy of Luxembourg, whether built on or otherwise, are subject to property tax in respect of the properties they own as of 1 January of the assessment year.

If the property belongs to several people, they are jointly liable to pay the tax.

Buildings under construction are not taken into account when applying the property tax.

How to proceed

Taxable properties

Taxable properties are divided into two categories:

  • A refers to agricultural and forestry properties;
  • B refers to other properties. This category can, depending on the commune, be subdivided into six classes depending on use:
    • B1 - commercial buildings;
    • B2 - mixed-use buildings;
    • B3 - buildings for other uses;
    • B4 - single-family houses and houses for letting;
    • B5 - properties not built on except residential building plots;
    • B6 - residential building plots.

It should be noted that parcels of land forming part of operational assets are also taxable.

The following are exempted from property tax:

  • Property assets belonging to the State and the communes; used for a public service;
  • Property assets belonging to charitable organisations;
  • Buildings belonging to hospitals and religious orders when used for medical purposes, worship, religious education or for administrative purposes;
  • Civil engineering structures, railway lines and roads and administrative property assets belonging to CFL.

How the tax is calculated

Property tax is calculated using the following formula:

Property tax = tax base x communal rate

Tax base

Luxembourg Inland Revenue (ACD) identifies and assesses the taxable amount in accordance with the following formula:

Tax base = unit value x assessment rate

  • Unit value

Assigned by the Service des évaluations immobilières (the property assessment department) of the Luxembourg Inland Revenue (ACD), it classifies buildings based on their use (see above).

The unit value is set based on a statement of rental properties as of 1 January 1941 and indexed at today's values. This rule also applies to all new buildings which are valued at the rentable value they would have achieved as of 1 January 1941, then indexed in order to obtain their current value.

The valuation thus determined is notified by post, in the year following the purchase or the end of construction:

    • to the taxpayer, by means of an 'assessment of the unit value and property tax base' and; 
    • to the communal authority where the building is located.
  • Assessment rate

The assessment rate, determined by the legislator, is set based on the nature of the property asset and on its location. Generally, it ranges from 0.7% to 1%.

Communal rate

Set for each calendar year by the communal authority, this rate varies depending on the place of establishment and the category of the building (commercial building, building plot, rental property, etc.).

Rates for the various communes are published in the Official Journal, Mémorial B each year.

Example: an entrepreneur owns a commercial building in Luxembourg city with a unit value of EUR 5,000. The property tax for 2013 is calculated as follows:

Tax base: EUR 5,000 x 1% (assessment rate) = EUR 50

Property tax: EUR 50 x 750% (communal rate B1) = EUR 375

Tax payment

The property owners concerned receive a property tax assessment by post from the communal authority, showing the amount payable and the payment deadline.

The frequency of the tax payment varies depending on the amount of tax applicable and is based on the following schedule:

Amount of tax

Payment date(s)

Sum payable
(on each payment date)

less than EUR 55

15 November

annual amount in full

between EUR 55 and EUR 110

15 May and 15 November

half of the annual amount

more than EUR 110

15 February, 15 May, 15 August and 15 November

a quarter of the annual amount

 

The amount of this tax can be offset against the company's business profit when declaring income tax, if the building taxed forms part of its invested net assets.

 

In the event of a complaint concerning:

  • the property tax assessment, taxpayers should apply to the board of the mayor and aldermen of the commune where it is due;
  • the tax base assessment, taxpayers should apply to the director of the Luxembourg Inland Revenue.

Who to contact

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