New rental rules in Luxembourg: what has changed since 1 August 2024

Since 1 August 2024, Luxembourg has introduced significant reforms to residential lease legislation, aimed at strengthening tenant protections and clarifying landlord obligations. Here is an overview of the main updates.

A mandatory written lease agreement

From now on, all rental agreements must be in written form and include mandatory information, such as the identities of the parties, the rent and charges, and the lease duration. This measure aims to ensure greater transparency and prevent misunderstandings between tenants and landlords.

A reduced security deposit

The maximum security deposit has been reduced from three to two months' rent. Specific deadlines have also been set for returning the deposit at the end of the lease, with penalties for unjustified delays.

Shared estate agency fees

Estate agency fees are now split equally between the landlord and the tenant, with each party covering 50% of the costs. Previously, these fees were borne entirely by the tenant.

Limits on rent increases

The new rules cap rent increases. For existing tenants, rent cannot go up by more than 10% over a two-year period, and any increase must be justified by property improvements or higher maintenance costs. This measure protects tenants from sudden rent hikes and helps keep rents affordable.

Rules for shared housing

Shared housing now has a specific legal framework. A single rental agreement must be established between the landlord and all co-tenants, who are jointly responsible for the lease obligations. A written co-tenancy agreement is also required to formalise the arrangements of communal living.

End of the "luxury housing" designation

The "luxury housing" classification, which previously allowed exemptions from the legal rent cap, has been abolished to prevent misuse and ensure consistent application of rent-cap regulations.