On 14 October 2020, the Luxembourg government filed the 2021 budget bill of law (n°7666) with the Parliament. The proposed measures are driven primarily by the COVID-19 crisis and resulting budget constraints, as well as the will to ensure social fairness and competitiveness.
In this context, the government deliberately chose not to increase or introduce new taxes for individuals, such as inheritance or wealth taxes, but it proposes inter alia to introduce an already much-talked about 20% real estate levy as of 1 January 2021 on gross income (rents and capital gains) derived by certain investment funds from real estate located in Luxembourg. In addition, the government proposes to raise transfer taxes on contributions of Luxembourg real estate and to introduce a prohibition for family wealth management companies (SPF) to invest into real estate through tax transparent partnerships.
Our tax experts have performed an in-depth analysis of these measures and will provide you with an insight into their exact scope and main consequences for the Luxembourg real estate market.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.