Recent changes in law and regulations
Tax regime amendments
On 17 December 2021, the budget law for 2022 was voted by the Parliament (the “Budget Law“).
The Budget Law provides for certain tax measures, among which, the main items are the following:
Revaluation of the multiplying coefficients applicable to acquisition prices
Pursuant to paragraph 6 of Article 102 of the Luxembourg income tax law, (the “LIR”), a new table of multiplying coefficients was introduced.
These coefficients serve to reevaluate the acquisition price of a real estate property while computing the capital gain amount realized at the disposal of said property within the scope of Articles 99ter to 101 LIR.
Significant changes for homebuyer savings contracts
Homebuyer savings contracts will undergo significant changes. As a reminder, they were put into place to allow the contracting parties to acquire or construct a residence for personal use at the end of the savings phase.
The Budget Law expands the list of fiscally encouraged tax purposes by adding the option to finance via this savings plan the maintenance and repair expenses of the residence for personal, as well as the installation of solar photovoltaic or thermal panels linked to the residence.
Previously, the installation of solar panels was not one of the categories of items on the list because it was considered operating equipment (Betriebsvorrichtungen) and not an integral part of the building to which they were linked.