Posted on 08 March 2022
Selling your main residency in Luxembourg
Building up your real estate assets sometimes involves reselling property, the purpose being to make a capital gain on the property sold. In Luxembourg, you can take advantage of different allowances when selling a property.
But how is this capital gain taxed in the context of the sale of the main residency? What are the conditions to be respected?
What is a main residency?
To consider your home as your main residency, several conditions must be met.
You must distinguish two cases:
1. You live in the property at the time of the sale
In this case, one of the following three conditions must be met for the property to be considered your main residency:
- You have lived in the property following its acquisition or completion
- You have lived in the property for 5 years before selling it
- You sell the property for imperative family or professional reasons
If you meet one of the three conditions above, then the property is considered your main residency. However, the property must be sold by December 31 of the year following the move.
2. You do not live in the property at the time of the sale
In this situation, you will need to meet all three of the following conditions simultaneously for the property to be considered your main residency:
- You have lived in the property following its acquisition or completion
- You do not own another home (second home or other)
- You sell the property for imperative family or professional reasons
When these three conditions are met simultaneously, then the property is considered your main residency, even if you actually sell it after December 31 of the year following your move.
How is the capital gain taxed?
Good news: the capital gain realized on the sale of your main residency is not taxable!
How do I declare the sale of my main residency?
Simply complete the first page of Form 700.
Would you like to be guided through the completion of your tax return? Connect to taxx.lu!
