Luxembourg: Worked Example of Tax on Rent
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Tax Example: Rent
| Non-resident couple's joint monthly rental income1 | €1,500 | €6,000 | |
| Annual Rental Income | 18,000 | 72,000 | |
| Less Depreciation Allowance2 | (6,605)3 | (20,571)4 | |
| Less Costs5 | (1,800) | (7,200) | |
| Less Standard Deduction6 | (480) | (480) | |
| = Taxable Income | 9,115 | 43,749 | |
| Income Tax Rates7 | |||
| Income Tax | 1,401 | 8,712 | |
| Annual Income Tax Due | €1,401 | €8,712 | |
| Tax Due as % of Gross Income | 7.78% | 12.10% | |
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DISCLAIMER: The information contained above is marketing material only and is not written tax advice directed at the particular facts and circumstances of any person and should not be relied upon. We encourage you to discuss your particular situation with us or an independent tax advisor. This information was last updated on November 29, 2007.
Notes
1 The property is jointly owned by husband and wife.
2 The rate of depreciation allowance is 2% for properties over 6 years old.
3 The property value is estimated to be €330,275.
4 The property value is estimated to be €1,028,571.
5 Estimated values. Deductible costs are maintenance and repair costs, insurance premiums, management charges, and real estate tax (10% of annual rental income).
6 The standard deduction is €480.
7 Income is taxed at progressive rates.
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