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Luxembourg: Worked Example of Tax on Rent

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Last Updated: Jul 21, 2008

Tax Example: Rent

Non-resident couple's joint monthly rental income1 €1,500 €6,000 €12,000
Annual Rental Income 18,000 72,000 144,000
Less Depreciation Allowance2 (6,605)3 (20,571)4 (48,000)5
Less Costs6 (2,700) (10,800) (21,600)
Less Standard Deduction7 (480) (480) (480)
= Taxable Income 8,215 40,149 73,920
Income Tax Rates8
Income Tax 1,263 7,291 20,456
Annual Income Tax Due €1,263 €7,291 €20,456
Tax Due as % of Gross Income 7.02% 10.13% 14.21%
Thanks to:

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 July 21, 2008.


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 The property value is estimated to be €2,400,000.

6 The income-generating expenses, including real estate tax, are estimated to be around 15% of the gross rental income.

7 The standard deduction is €480.

8 The applicable tax rate for non-resident individuals is not provided.

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