Selling an inherited house in Luxembourg: taxes, timing, mistakes to avoid

1. What inheritance duty do you pay on the house?

It all depends on your relationship with the deceased. Children and parents pay 0 % on their legal share, and the spouse and a partner declared for at least 3 years pay 0 % in every case. A share received by will beyond the legal share is taxed at 2.5 % or 5 % in the direct line. For other heirs, the bill climbs fast: 6 % for a brother or sister on the legal share, 9 % for a nephew, 15 % for an unrelated person, with a surcharge that applies to the whole share once more than €10,000 is received (Guichet.lu).

In concrete terms, for a house worth €1,200,000 net of debts: two children who are legal heirs pay nothing. A sister as sole heir pays 16.8 %, or €201,600. A nephew as sole legal heir pays 25.2 %, or €302,400.

The succession declaration must be filed within 6 months if the death occurred in Luxembourg, 8 months elsewhere in Europe, even when nothing is due (PFI, AED). The duties are paid within 6 weeks of the administration's demand. Filing late costs an extra tenth of the duties, then half as much again if enforcement follows.

2. What capital gains tax applies when you sell?

The heir takes over the deceased's purchase price and date, not the value at death (ACD). If your parents bought more than 5 years ago, the gain is taxed at half the global rate, a maximum of about 21 %, plus the fonds pour l'emploi. If they bought 5 years ago or less, it is a speculative gain, taxed at the full rate. The quarter rate ended on 30 June 2025.

Two allowances add up per heir: €50,000 every 10 years, €100,000 for a jointly taxed couple, and up to €75,000 more if the house inherited in the direct line was the parents' last main residence. This second allowance applies to one property per taxpayer only.

Example: your parents bought the house in 1990 for €200,000. With the 1990 coefficient of 2.05, the revalued price is €410,000. Two children sell it for €1,200,000. Gain: €790,000, or €395,000 each. After €125,000 of allowances, €270,000 per child remains taxable, at no more than 21 %, so a maximum of about €56,700 each before the fonds pour l'emploi. The real amount depends on your other income.

The value declared in the succession does not reduce your capital gain. Inflating it does nothing for income tax, and understating it exposes you to an AED check.

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If you lived in the house yourself as your main residence, the main residence exemption may apply, under strict conditions (ACD tool).

3. What is the house worth today?

Less than two years ago, and very differently by region. On sales from 1 July 2025 to 30 June 2026, a house sold for an average of €945,274, with a median of €870,000. In the canton of Luxembourg, the average reaches €1,372,796, against €729,993 in the North. Prices of existing houses are still down 3.7 % year on year, and 709 houses were sold in the second quarter of 2026, against an average of 909 between 2017 and 2021 (Le Logement en chiffres no. 20).

A family house often has one handicap: its condition. The energy performance certificate is compulsory to sell, and 59 % of the houses listed in 2024 were already in the most efficient classes (Observatoire de l'Habitat, Note 43). A 1970s house that was never renovated is compared with them, and the buyer will deduct every euro of works.

4. What timeline should you expect?

Usually several months before the house even goes on the market. First comes the succession declaration and the acte de notoriété drawn up by the notary, without which no sale can be signed. If a surviving spouse inherits alongside children, they can choose between the usufruct of the family home and a share in full ownership, at the latest 3 months and 40 days after the death. Then come the energy performance certificate, clearing the house and the inspections. Then the compromis, and the notarial deed a few weeks or months later. The tax year of the capital gain is the year of the deed, not of the compromis.

5. Which mistakes cost the most?

Believing the death resets the clock. In Luxembourg, unlike France, there is no step-up to the value at death: your parents' purchase price is what counts.

Rushing the sale of a recently bought house. If the deceased bought it 5 years ago or less, the gain is speculative and taxed at the full rate, with no allowance. A few months of waiting can change the bill.

Setting the price on emotion or on the neighbour's listing. For apartments, the average gap between asking price and sale price reaches 18 % nationally. An overpriced house stays in the shop window, and every month costs insurance, heating, upkeep and taxes.

Leaving the house empty for years. It deteriorates, and bill 8082 eventually provides for a tax on vacant homes. It has not been voted, but the direction is clear.

Forgetting the paperwork. Invoices for major works, the purchase deed, acquisition costs: without them, you cannot deduct them from the gain.

6. What if one heir wants to keep the house?

That is possible through a partition with a balancing payment (soulte): the heir who keeps the house pays the others the value of their shares. The partition duty is well below the 7 % of a sale; have your notary calculate it. As a rule, the share bought out is treated as a new acquisition for capital gains tax, with its own date, which matters in case of a quick resale. Check with your notary or tax adviser.

Renting is the other option. But rent is capped at 5 % of the capital invested, the deposit at two months, and agency fees have been split 50/50 with the tenant since 1 August 2024. In joint ownership, every major decision requires everyone's agreement.

How do you sell the family house calmly?

By putting things in the right order: succession filed, heirs agreed on the price and on a single point of contact, capital gain calculated for each heir, technical file ready. Only then, the sale.

Many families do not want to see their parents' house photographed on every portal. Secretimmo, an off-market agency and platform, presents it discreetly to qualified buyers. With a public exclusive mandate our fee is 3 %, and 5 % for an off-market sale. Start with the free estimator at secretimmo.lu/valuation. The valuation is free if a mandate is signed within the week, otherwise it is invoiced at €600 excluding VAT.

This article draws on Le Logement en chiffres no. 20 (Observatoire de l'Habitat and STATEC, sales from 1 July 2025 to 30 June 2026), Note 43 of the Observatoire de l'Habitat and the Guichet.lu, AED and ACD pages on successions and capital gains. The figures and examples are indicative and do not replace the advice of your notary or tax adviser.

Frequently asked questions

Do you pay inheritance duty on your parents' house in Luxembourg?

Not on the legal share: children pay 0 %. Only a share received by will beyond the legal share is taxed, at 2.5 % or 5 %. The succession declaration remains compulsory within 6 months if the death occurred in Luxembourg.

What value is the capital gain on an inherited house based on?

On the deceased's purchase price and date, revalued by the official coefficient. The value declared in the succession does not count. After more than 5 years of ownership, the gain is taxed at half the global rate, a maximum of about 21 % plus the fonds pour l'emploi.

What is the €75,000 allowance for an inherited house?

An extra allowance, per heir, for a built property inherited in the direct line that was the parents' last main residence. It comes on top of the €50,000 allowance every 10 years and applies to one property per taxpayer only.

Can you sell an inherited house before the succession is complete?

The sale requires the acte de notoriété identifying the heirs and the agreement of all heirs in joint ownership. In practice, you file the succession declaration, then sign the compromis. Your notary coordinates both.

How long must you keep an inherited house to avoid a speculative gain?

The 5-year period runs from the deceased's purchase, not from the death. If your parents bought more than 5 years ago, you can sell straight away at half the global rate.