The recent months have brought a variety of legislative changes impacting the real estate industry in Luxembourg, and further legal initiatives have been announced in draft bills. Furthermore, the Luxembourg courts have issued several important decisions with respect to the impact of the COVID-19 pandemic on existing contracts.

Below is an overview of the most relevant topics.

Applicable Changes in laws and regulations

  1. Tax regime amendments

The Budget Law for the year 2021, voted on 19 December 2020 introduced several amendments to the current tax regime impacting the real estate sector:

  • Real Estate Levy impacting certain real estate special purpose investment vehicles

A real estate levy (prélèvement immobilier) of 20% will be applied on real estate revenues derived by certain special purpose investment vehicles from Luxembourg-located properties. These revenues include the gross rents and the real estate capital gains realized by these vehicles, as well as capital gains resulting from the alienation of units in certain types of entities.

Overview of the most relevant topics.