Posted on 07 March 2025
Luxembourg tax 2024: Changes for residents and cross-border commuters
Luxembourg tax changes 2024: updated rates, new deduction limits, form updates, capital gains adjustments, and mandatory NIF for cross-border workers.
1. Adjustment of the tax scale
The tax scale has been updated for the 2024 tax year. This adjustment is intended to reflect on economic developments, in particular by taking account of inflation and new budget priorities.
2. Limit on deductible interest expense for principal residence
As of the 2024 tax year, the date of availability of the main residence becomes the reference criterion for determining the limit on deductible interest expense, replacing the date of occupancy used in previous years.
As of the 2024 tax year, the date of availability of the main residence becomes the reference criterion for determining the limit on deductible interest expense, replacing the date of occupancy used in previous years.
Here are the new deductible limits applicable depending on the date on which the property is available:
- Availability after 31/12/2022: Full deduction of interest expense.
- Availability between 31/12/2018 and 01/01/2023: Limit of €4,000 per person.
- Available between 31/12/2013 and 01/01/2019 : Limit of €3,000 per person.
- Availability before 01/01/2014: Limit of €2,000 per person.
These limits are cumulative for each member of the household (spouse and children).
Example:
A family of 4 (two parents and two children) with a home available in 2020 can deduct up to €16,000 in interest charges (€4,000 per person).
A family of 4 (two parents and two children) with a home available in 2020 can deduct up to €16,000 in interest charges (€4,000 per person).
3. Fusion of forms 190 and 210 for rental income, updated depreciation rates and exemption for social rental management
From tax year 2024, forms 190 and 210 have been merged into a single document, resulting in a complete overhaul of form 190, which no longer follows the format used in previous years.
The depreciation rates applicable to real estate have also been updated. These adjustments take account of the specific features of each type of asset.
At the same time, a 90% tax exemption now applies to rental income from social rental management from the 2024 tax year, compared with 75% for 2023.
4. Form 700: Capital gains to be transferred, revaluation factors and quarter of the overall rate
The revaluation coefficients applicable to capital gains on real estate have been updated to reflect economic developments and allow the initial acquisition value to be adjusted for inflation.
The revaluation coefficients applicable to capital gains on real estate have been updated to reflect economic developments and allow the initial acquisition value to be adjusted for inflation.
From the 2024 tax year, the transfer of a capital gain becomes possible under certain strict conditions. This mechanism makes it possible to defer the taxation of a capital gain realised on a property to a replacement property, provided that the specific criteria laid down are met.
In addition, capital gains from disposals will now be taxed at a quarter of the overall rate, as opposed to the half-rate applied in previous tax years, notably 2023.
In addition, capital gains from disposals will now be taxed at a quarter of the overall rate, as opposed to the half-rate applied in previous tax years, notably 2023.
5. Mandatory TIN (Tax Identification Number) for cross-border commuters
From the 2024 tax year, all cross-border commuters (tax residents outside Luxembourg working in the country) must indicate their NIF (Numéro d'identification fiscale) on their Luxembourg tax return.
6. Overtime tax credit and scale tax credit on request
From the 2024 tax year onwards, certain taxpayers may benefit from a new tax credit and a tax credit for overtime, provided that they explicitly request it. This credit is designed to reduce the tax burden for certain taxpayers depending on their income and personal circumstances.
From the 2024 tax year onwards, certain taxpayers may benefit from a new tax credit and a tax credit for overtime, provided that they explicitly request it. This credit is designed to reduce the tax burden for certain taxpayers depending on their income and personal circumstances.
