The Rent and Rental Increases

Understand how the rent is decided and yearly rental increases...

The rent is agreed between the landlord and the tenant. Unless the property is classified as a luxury property, the annual rent cannot exceed five percent of the landlord investment, indexed on a yearly basis. The landlord investment is defined as the construction cost or the buying price increased by house improvements.

The rent is usually payable monthly in advance.

Standard properties

The rental price of a furnished property cannot be higher than double the rent of an equivalent unfurnished property.

Note: A property containing one chair, one table and one bed is not viewed as fully furnished. The property must be fully furnished to be considered as such.

The landlord can increase the rent every other year based on an index of reference published on a regular basis in the Official Gazette (Mémorial - Journal Officiel du Grand-Duché de Luxembourg) and some daily newspapers or specialised magazines. However, the rent can be reviewed at any time if the landlord investment is itself revalued (a typical example being improvement to the property).

Luxury properties

Luxury properties do not follow the same rent procedure and reviews. To qualify as a luxury property (propriété de luxe), the landlord's investment per square metre of living space has to exceed a certain amount per square metre. This amount is fixed by law. Rent increases are not based on the evolution of the index, but are mutually agreed by the landlord and the tenant.

Note: the rental agreement must specifically mention that the house or the flat is a luxury property to be considered as such. If the rental contract does not indicate that the property is a propriété de luxe then the rental laws applying to normal properties will apply.