- 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.
How to proceed
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 divided into flats;
- 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
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 %.
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.
Tax base: EUR 5,000 x 1 % (assessment rate) = EUR 50
Property tax: EUR 50 x 750 % (communal rate B1) = EUR 375
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
less than EUR 55
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
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.