Inheritance and Real Estate Sale Taxation in Luxembourg: A Unique Opportunity in 2025

In 2025, Luxembourg offers an exceptionally favorable tax environment for heirs wishing to sell a property.

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🏠 Inheritance Tax

• Full exemption for direct heirs (parents, children, spouses, or registered partners of at least 3 years).

• Siblings: 6% (intestate succession) or 15% (by will).

• Other heirs: between 9% and 15% depending on the inherited share.

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🏡 Selling an Inherited Property: What You Need to Know

Even if inheritance is tax-exempt, the sale of the property may trigger capital gains taxation:

• Quick sale (within 5 years, or within 2 years if completed before June 30, 2025): taxation at a progressive rate, up to 42%.

• Sale after the holding period (5 years, or 2 years for sales before June 30, 2025): reduced tax rate of 10.5%.

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Tax Advantages:

• €75,000 allowance if the property was the parents’ main residence.

• Decennial allowance of €50,000, or €100,000 for couples.

• Capital gain calculation:
  Based on the indexed acquisition price minus deductible costs (notary fees, agency fees, renovation works).

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📅 Particularly Favorable Period Until June 30, 2025

• The minimum holding period to benefit from the reduced 10.5% tax rate is exceptionally lowered to 2 years.

• After July 1, 2025, the minimum holding period will revert to 5 years.

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✅ Our Recommendations

• Sell before June 30, 2025 to take full advantage of the favorable tax conditions.

• Keep all supporting documents (invoices, official deeds).

• Consult a notary or a tax advisor to secure the transaction both legally and fiscally.