Capital gains tax on property in Luxembourg: the exact calculation with an example

Which rule applies to a sale signed in 2026?

The 5-year rule. Since the law of 22 May 2024, applicable from tax year 2025, the speculation period for real estate is no longer 2 years but 5 years (guichet.lu). In practice, for a deed signed in 2026:

• held for 5 years or less: speculation gain, taxed at the ordinary progressive scale (marginal rate up to 42 % plus the employment fund contribution), with no revaluation and no allowance;
• held for more than 5 years: capital gain, taxed at half the global rate, so 21 % at most, plus the employment fund contribution (ACD).

The quarter global rate that many sellers still have in mind ended on 30 June 2025, or 30 September 2025 if the preliminary contract (compromis) was registered by 30 June. It does not apply in 2026. The tax year is the year of the notarial deed, whatever the payment date. And if the property is your main residence, the gain is exempt whatever the holding period, but the sale must still be declared.

What can you deduct from the sale price?

More than you think, provided you kept the paperwork. The 2026 form 700 has three blocks (form 700F-2026):

• the purchase price, plus registration and transcription duties (7 %, i.e. 6 % plus 1 %) and acquisition costs such as the agency commission or the energy performance certificate;
• capital investment works, meaning major works that raise the value or change the nature of the property: an attic conversion, an office turned into housing. Keep the invoices, the tax office may ask for them;
• selling costs directly linked to the sale, such as the agency fee, which are deducted from the sale price. These are actual costs, itemised in an annex. There is no flat-rate amount.

Ordinary maintenance and small repairs are generally not added to the cost base, according to accepted practice. A repainted kitchen is not an investment. An extension is.

How do the revaluation coefficients work?

They correct for inflation, and only if you held the property for more than 5 years. The purchase price and each works expense are multiplied by the coefficient of the year the money was spent. The table to use is the one for the year of sale, published on page 3 of form 700. Since the budget law of 19 December 2025, these coefficients are indexed to the consumer price index (ACD, newsletter of 23 December 2025).

In the 2026 table, dated 17 June 2026, some values are confirmed: 2.05 for 1990, 1.33 for 2010, 1.22 for 2015. For other years, our reading of the table gives 1.25 for 2012 and 1.18 for 2018: indicative coefficient, to be checked in the official table before any tax return.

An error of a few hundredths on one coefficient moves the gain by several thousand euros. Always check the figure in the official PDF for the year of sale.

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The worked example, line by line

Take a single person, tax class 1, who sells an apartment in November 2026 that is not their main residence. They bought it in 2012 for €450,000, plus 7 % duties. They spent €30,000 on capital investment works in 2018. They sell for €780,000, with a 3 % agency fee.

Half the global rate depends on your total income for the year: line 8a shows the ceiling, line 8b a situation with a 30 % global rate. We have not reproduced the 2026 scale here, so both amounts are orders of magnitude. Notary fees on the purchase and the energy certificate could still be added to line 2 if you kept the receipts.

What does each variant change?

A lot, and often in your favour. Four common cases, always based on the example:

• The 3 % fee is quoted before VAT and the 17 % VAT is not recoverable: the fee rises to €27,378, the net price falls to €752,622, the gain to €115,347 and the taxable base to €65,347.
• You are a jointly taxed couple: the allowance is €100,000, not €50,000. The taxable base drops to €19,325.
• It is your parents' home, inherited in direct line, and it was their last main residence: an extra €75,000 allowance applies first, then the €50,000. The taxable base falls to zero, because the allowance cannot create a loss (fiduciaire-expert.lu).
• The true 2012 coefficient is 1.28, not 1.25: the revalued acquisition rises to €616,320 and the gain falls to about €104,880.

The €50,000 allowance is not annual. It covers 10 years and is reduced by whatever you already used in that period. If you sold another property four years ago, check what you have left.

And if you sell within 5 years?

The bill changes in nature. Imagine the same apartment bought in 2022 for €481,500 all-in, with the same works and the same net price. The gain becomes €756,600 - €481,500 - €30,000 = €245,100. No revaluation, no allowance, and taxation at the full scale, up to 42 % plus the employment fund contribution. The base is more than three times that of the example, and the rate can double.

Two useful points. A loss can only offset other capital or speculation gains of the same year: not your salary, and with no carry-forward to later years (guichet.lu). And the rollover of the gain into social rental or new-build housing, open to sales in early 2025, is not available for a sale signed in 2026. Only sales to the State, a commune or the Fonds du Logement remain exempt, except under a legal pre-emption right (ACD).

How do you prepare your sale to pay the right tax?

By starting with the right price, then the right papers. Gather the purchase deed, the statement of duties paid, the invoices for capital works with their year, and the agency contract for the sale. Check the coefficients in the official table of form 700 for the year of sale. If the property was your main residence, test your case with the ACD online tool: the exemption can still apply after a move, under conditions. Then have the calculation checked by your notary or tax adviser before signing the preliminary contract, not after the deed.

The first figure in the calculation is still the net sale price. A valuation that is too low costs you more than the tax, one that is too high makes the sale drag. At Secretimmo, an off-market agency and platform, we start from actual sales and our buyer network. Begin with the free estimator at secretimmo.lu/valuation: you get a range in two minutes. The detailed valuation is free if a mandate is signed within the week, otherwise it is invoiced at €600 excluding VAT.

This article draws on the pages of the Administration des contributions directes and guichet.lu, form 700F-2026 and analyses by fiduciaire-expert.lu and fiduciaire-lpg.lu. The figures and coefficients quoted are indicative and do not replace the advice of your notary or tax adviser.

Frequently asked questions

What is the speculation period for property in Luxembourg in 2026?

5 years, since the law of 22 May 2024, applicable from tax year 2025. A sale within 5 years is taxed at the full scale, with no revaluation or allowance. Beyond that, the gain is taxed at half the global rate, 21 % at most plus the employment fund contribution.

Does the quarter global rate still apply in 2026?

No. It ended on 30 June 2025, extended to 30 September 2025 for preliminary contracts registered by 30 June. A sale signed in 2026 falls under half the global rate if the property has been held for more than 5 years.

How does the €50,000 allowance work?

It is deducted from the revalued gain, once every 10 years, and is reduced by allowances already used in that period. It is €100,000 for a jointly taxed couple and cannot create a loss. It does not apply to a speculation gain.

Where do I find the right revaluation coefficient?

On page 3 of form 700 for the year of sale, published by the Administration des contributions directes. For a 2026 sale, that is form 700F-2026. Use the coefficient for the year of each expense, purchase and works alike.

Do you pay capital gains tax on your main residence?

No, the gain on your main residence is exempt whatever the holding period. The sale must still be declared, and after a move the exemption depends on precise conditions that you can test with the ACD online tool.