Inheritance tax in Luxembourg for foreign heirs: what expats need to know

Did the deceased live in Luxembourg?

This is the first question, and it decides almost everything. If the deceased's last home was in Luxembourg, the heirs pay inheritance tax (droits de succession) on all of their movable assets, wherever those are held, and on their Luxembourg real estate. Property they owned abroad is exempt in Luxembourg (Guichet.lu).

If the deceased lived outside Luxembourg, the logic is reversed: Luxembourg taxes only the real estate located in Luxembourg, through a transfer duty on death (droit de mutation par décès) at the same rates. Their Luxembourg bank accounts are not taxed. An expat who moved back to Lyon or Porto but kept an apartment in Kirchberg therefore leaves their heirs a single Luxembourg question: that apartment.

Your own residence, on the other hand, makes no difference. Whether you live in Luxembourg or on the other side of the world, the Luxembourg tax authorities apply exactly the same rates. Being a foreigner does not count against you. It does not protect you either.

How much does each heir pay, depending on the relationship?

Everything depends on how you were related to the deceased, and the range runs from nothing to almost half. In the direct line, meaning children and parents, the legal share (the portion of the estate the law reserves for you) is exempt: 0 %. Anything above that share, left to you by will, is taxed at 2.5 % or 5 % depending on the case. A spouse, or a partner declared at least three years before the death, pays 0 %, with or without children together. Brothers and sisters pay 6 % on their legal share and 15 % above it, uncles, aunts, nephews and nieces 9 % and 15 %, and anyone else 15 %.

These base rates are then increased as soon as an heir's net share exceeds €10,000. The surcharge rises in brackets up to 22/10 above €1.75 million, which takes the top rate to 48 %. Guichet.lu gives a telling example: a brother who inherits €600,000, half as his legal share and half under a will, faces a surcharge of 14/10 and pays €151,200 in total (Guichet.lu).

The classic trap for expat couples: living together without being married or registered as partners in Luxembourg. For the tax authorities, the surviving partner is then an unrelated person, taxed at 15 % before the surcharge. Ask a notary how your relationship is recognised, before the question becomes urgent.

In Luxembourg, the family relationship sets the tax, not the passport: 0 % for a child on their legal share, up to 48 % for an unrelated heir on a very large share.

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How long do you have to file, depending on where the death occurred?

The clock starts on the day of death, and the deadline depends on where it happened: 6 months if the death occurs in Luxembourg, 8 months elsewhere in Europe, 12 months in America and 24 months in Africa or Asia (PFI, Registration Duties Authority). A presumptive heir can ask the director of the Registration Duties, Estates and VAT Authority (AED) for an extension in writing.

For a deceased who lived in Luxembourg, the heirs file an inheritance tax return (déclaration de succession). For a non-resident deceased who owned property in Luxembourg, they file a return for the transfer on death (déclaration de mutation par décès) with the AED office responsible for the property. In both cases, the return is compulsory even if nothing is due: only renouncing the estate releases you from it. An exempt estate then entitles you to a free certificate, which banks often ask for before they release accounts (PFI, inheritance FAQ).

Filing late is expensive: one tenth of the duty on top after a bailiff's summons, then an increase of half if you still do not file, and €25 per week for a forgotten return on which no tax is due. On the other hand, you can correct your return without any fine for six weeks after filing.

Why could you be taxed twice?

Because Luxembourg has not concluded any double tax treaty on inheritance tax (Chambers Private Wealth 2025). Nothing therefore stops your country of residence, or the deceased's, from also taxing what you receive, including an apartment in Luxembourg City.

Three things limit the risk. Luxembourg exempts real estate located abroad. Luxembourg rates in the direct line and between spouses are zero on the legal share, so there is often little tax to be paid twice. And the heir's country may, under its own rules, grant a credit for tax paid abroad. Those rules vary widely: some countries tax according to where the heir lives, others according to where the deceased lived, others according to where the assets are. Check the rules in your own country, with a local notary or tax adviser, before you sign anything in Luxembourg.

What does the EU Succession Regulation change?

It deals with civil law, not with tax. EU Regulation 650/2012, which has applied since August 2015, provides in principle that a single law governs the whole estate: the law of the deceased's last habitual residence, unless they chose the law of their nationality. As a rule, that law decides who inherits and in what proportions. The regulation also created the European Certificate of Succession, which lets you prove you are an heir from one member state to another.

What it does not do: it expressly leaves tax matters out. How the regulation applies to your situation, especially if the deceased chose a law in their will, is something to check with your notary.

Should you keep, divide or sell the inherited property?

Before you decide, you need to know what the property is worth, because that value is the basis for the duties. It is declared at its market value on the day of death, and the AED can check that value through an expert valuation or by comparing it with recent sales (Guichet.lu). For a sense of scale, an existing apartment in Luxembourg sold for an average of €7,712 per m² over the twelve months to the end of June 2026, and a house for €945,274 on average (Le Logement en chiffres no. 20). An undervalued property exposes you to a reassessment. An overvalued one makes you pay too much.

If one heir buys out the others, the division goes through a notarial deed, with a partition duty well below the 7 % charged on a sale: ask your notary to work out the exact figure. If you sell, you take over the deceased's purchase price and date: after more than five years of ownership, counted from their purchase, the capital gain is taxed at half the global rate, with an allowance of €50,000 per person and, for the parents' main residence inherited in the direct line, up to €75,000 more (Luxembourg Inland Revenue).

How do you handle it from abroad, step by step?

In four steps. Note the deadline that applies to you, 6, 8, 12 or 24 months, and have a search made for any will (€10 online, €20 on paper). Instruct a Luxembourg notary: optional for an exempt estate, but strongly recommended, and a taxable estate is declared by a professional. Have the property valued on actual sales. Finally, check the Luxembourg calculation against your own country's rules before you sign.

At Secretimmo, we also work with heirs who live abroad: a well-argued valuation, coordination with the notary and, if you sell, a discreet sale to our network of off-market buyers. Start with the free estimator at secretimmo.lu/valuation: a range in two minutes, from wherever you are. 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 information published by Guichet.lu, the Registration Duties, Estates and VAT Authority (PFI), the Luxembourg Inland Revenue (ACD), the Chambers Private Wealth 2025 guide and Le Logement en chiffres no. 20 (Observatoire de l'Habitat and STATEC). The figures and examples are indicative and do not replace the advice of your notary or tax adviser, in Luxembourg or in your own country.

Frequently asked questions

Does an heir living abroad pay more inheritance tax in Luxembourg?

No. Your country of residence does not change Luxembourg rates: a child pays 0 % on their legal share, whether they live in Luxembourg or elsewhere. What matters is where the deceased lived, what they owned and how you were related.

Does Luxembourg tax the bank accounts of a non-resident deceased?

No. For a deceased who did not live in Luxembourg, only their real estate located in Luxembourg is taxed, through a transfer duty on death charged at the same rates as inheritance tax. Their Luxembourg accounts and other movable assets are not taxed.

What is the deadline for filing an inheritance tax return in Luxembourg?

6 months if the death occurred in Luxembourg, 8 months elsewhere in Europe, 12 months in America and 24 months in Africa or Asia. An extension can be requested in writing, and the return is still compulsory even if no duty is due.

Is there a treaty to avoid double taxation of inheritances?

No, Luxembourg has not signed any. The risk is limited by the exemption of real estate located abroad, zero rates in the direct line on the legal share and any tax credit your own country may grant. Check the rules in your country before you sign.

Does an unmarried partner inherit tax-free in Luxembourg?

Only if they were married to the deceased or declared as partners at least three years before the death. Otherwise they are treated as an unrelated person: 15 % before the surcharge, up to 48 % on a very large share.