New Rental Rules in Luxembourg: What Has Changed Since August 1, 2024

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

1. 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.

2. Reduced Security Deposit

The maximum amount for security deposits has been reduced from three to two months’ rent. Additionally, specific deadlines have been established for the return of this deposit at the end of the lease, with penalties for unjustified delays.

3. Shared Real Estate Agency Fees

Real estate agency fees are now split equally between the landlord and tenant, with each party covering 50% of the costs. Previously, these fees were solely the responsibility of the tenant.

4. Rent Increase Limitations

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

5. Regulations 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. Additionally, a written co-tenancy agreement is required to formalize the arrangements of communal living.

6. Elimination of “Luxury Housing” Designation

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