Capital gains and your main home in Luxembourg: will you be taxed when you sell?

The principle: your main home sells free of capital gains tax

The capital gain is the difference between your selling price and your purchase price (deed costs and certain works included). On most properties this gain is taxable. On your main residence it is not: article 102bis of the Luxembourg income tax law (LIR) provides a full exemption, with no price cap. The details of the sale are declared via form 700.

Whether you sell a flat in Petange bought at 380,000 euros and resold at 450,000 euros, or a family house held for twenty years, the gain remains tax-free as long as the property is your main residence in the tax sense. The whole question is therefore whether your situation ticks the right boxes.

The exact conditions for the exemption

The tax administration distinguishes two situations.

Case 1: you still occupy the home (or you sell quickly)

The home counts as your main residence if it is occupied by you at the time of the sale, or if the sale takes place no later than 31 December of the year following the year you moved out. In addition, one of these three conditions must be met:

• you occupied it from acquisition or completion;
• or you occupied it for at least the 5 years preceding the sale;
• or you are selling for family reasons, or because of a change of residence linked to your job (or your spouse’s or partner’s).

Case 2: the home is empty, or sold later

If the property is unoccupied at the time of the sale, or sold after 31 December of the year following the move, the exemption remains possible under a triple cumulative condition: you occupied it from acquisition or completion, you do not own another dwelling (second home, pied-a-terre), and the departure is motivated by family or professional reasons. Note: a dwelling you rent out to a third party does not count as “another dwelling”.

The deadline after moving out: the real rule (and a myth to forget)

You often read that you must sell “within 12 months” of leaving. That is inaccurate. The official rule refers to 31 December of the year following the year of the move. The actual window therefore depends on the month you leave:

• You leave the home in March 2025: you have until 31 December 2026, almost 22 months.
• You leave in November 2025: you also have until 31 December 2026, around 14 months.

Beyond that window, the exemption is not automatically lost: it simply switches to the triple condition of Case 2. Keeping proof of occupancy (invoices, residence certificate) is therefore useful.

Thinking of selling? A fair valuation is the starting point. Request yours, free of charge and without obligation.

Selling a rental property or a second home?

The regime changes completely. The capital gain becomes taxable, depending on how long you have held the property:

• Sale within 2 years (speculation gain): taxed at your full global rate.
• Sale after 2 years (disposal gain): taxed at half the global rate, roughly half your tax rate.

Two levers reduce the bill: a ten-year allowance of 50,000 euros (100,000 euros for a jointly taxed couple) per ten-year period, and the revaluation of the purchase price through coefficients that account for inflation. The temporary “quarter of the global rate” scheme (from the law of 22 May 2024) no longer applies: it covered sales completed up to mid-2025. For a precise calculation, consult your notary or a tax adviser.

Main residence: France and Luxembourg, two similar logics

This comparison often explains cross-border confusion: the current debate about a “main residence reform” is French, not Luxembourgish.

CARMO field data: what real capital gains look like in the South today

In the southern basin (Petange, Esch-sur-Alzette, Differdange, Dudelange), existing flats sit around 6,000 to 7,000 euros per m2 in early 2026, below the national average of 7,764 euros per m2 in Q4 2025 (Housing Observatory). After the 2022 peak and a correction of roughly 10 to 18% in 2023 and 2024, the picture has changed for sellers.

What we see in the field: an owner who bought in 2021 or 2022 often realises a small or zero gain. Someone who has held their property longer walks away with a real profit. In both cases, if it is the main residence, the tax question simply does not arise: it is exempt. Fear of a capital gains tax should never block the sale of a main residence.

A reform of main-residence capital gains? What we know as of 30 June 2026. You sometimes read that a draft law would extend deadlines or change the main-residence exemption. To date, no official source confirms it: neither the direct tax administration, nor the Ministry of Finance “What’s new 2026” overview, nor the Chamber of Deputies mentions such a text. The framework described here is the one actually in force. We will update this article as soon as an official text is filed.

If you are selling, if you are buying

If you are selling

First check your status: is the property your main residence in the tax sense? Keep proof of occupancy, anticipate the 31 December window if you have moved out, and have the property valued to know your real gain. If it is a rental property, ask your notary for a simulation before setting the price.

If you are buying

The exemption benefits the seller, but it also concerns your future: living in your new home as your main residence secures your own exemption on the day you resell. Something to factor in from the purchase, especially if you plan to rent the property out later. See the properties for sale with CARMO.

Frequently asked questions

Is the sale of my main residence taxed in Luxembourg?

No. The capital gain on the main residence is exempt from income tax (article 102bis LIR), with no price cap, as long as the occupancy conditions are met.

How long do I have to sell after moving out without losing the exemption?

Until 31 December of the year following the move. Beyond that, the exemption remains possible if you own no other dwelling and the departure is motivated by family or professional reasons.

What if I have already bought another home?

As long as the property sold is your main residence at the time of the sale, the exemption applies. Only in the case of a late sale of an empty dwelling does the “no other dwelling” condition come into play.

Is the gain on a rental property taxable?

Yes. After two years of ownership it is taxed at half the global rate, reduced by a ten-year allowance of 50,000 euros (100,000 euros for a couple). Within two years, the full rate applies.

Is a reform of the main-residence regime under way?

No official text is confirmed as of 30 June 2026 in Luxembourg. The debate about taxing the main residence currently concerns France.

How do I know my real capital gain?

Start from a reliable valuation of your property’s current value, compared with your purchase price. That is exactly the starting point we offer you.

Before setting a price, know your real margin.Request your free, no-obligation valuation: you will know where you stand, and what you actually net.

David Carmo, founder of CARMO Immobilier, has been a real estate professional since 2008. A former member of the board of directors and of the disciplinary council of the Chambre Immobilière du Grand-Duché de Luxembourg, he is today a founding member and board member of the Fédération des Agents Immobiliers (FAI) and a trainer at the Académie de l'Immobilier.

This article is provided for general information purposes and does not constitute tax advice or individualised legal advice. Most of the measures described are draft legislation and may still change. Before making any decision, review your situation with your notary, your tax adviser and the Administration de l'enregistrement.

Official sources:Administration des contributions directes, sale of the main residence (art. 102bis LIR); Guichet.lu, declaring the sale of a property; Housing Observatory, sale prices; Ministry of Finance, What’s new 2026.