Recent Legal Developments In Real Estate

I. Introduction

The Luxembourg legislators and administration have brought several legislative changes impacting the real estate industry in Luxembourg, and further legal initiatives have been announced in draft bills. The Luxembourg Constitutional Court also issued an important decision.

II. Recent changes in laws and regulations

1. New Tax measures

   • (i) New Double Tax Treaty ("DTT") between Luxembourg and the UK

On 19 July 2023, the Luxembourg Parliament ratified the new DTT between Luxembourg and the United Kingdom.

The new DTT has introduced a so-called "Property-Rich" provision in Article 13.2.

According to that provision, the right to tax gains realized through a sale of shares or corporate interests (or comparable interests, e.g., partnership or trust interests) in an entity deriving more than 50% of its value directly or indirectly from immovable property situated in the other state (a property-rich entity) is attributed to the