What changed for tenants and landlords on 1 August 2024

Luxembourg's residential tenancy law was substantially revised by the law of 23 July 2024, which entered into force on 1 August that year. The changes are not cosmetic: the maximum deposit fell, agency commission is now split by law rather than by custom, shared flats acquired a legal framework for the first time, and the concept of luxury housing, which had allowed the rent cap to be sidestepped, was abolished. Two years on, a surprising number of leases still circulate with clauses that are no longer valid.

The deposit: three months became two

The maximum rental guarantee is now two months' rent. It was three. Any lease clause providing for more is contrary to the law.

The reform also introduced a defined restitution procedure for the deposit at the end of a tenancy, with specific timescales and a sanction where the landlord does not respect them. This addresses what was, and remains, the single most common source of complaint from departing tenants.

The date matters. A lease signed before 1 August 2024 may legitimately have a three-month deposit, and that remains the case for the duration of that contract. If your lease was signed after that date and provides for three months, the clause is not enforceable.

Agency fees: split fifty-fifty by law

For every new lease concluded from 1 August 2024, estate agency commission must be shared equally between landlord and tenant, and this applies regardless of which party engaged the agency. A clause in the lease saying otherwise is void.

This is a genuine change in the economics of finding a flat. Previously it was common for the tenant to bear the whole commission, which, on top of a deposit and a first month's rent, made the entry cost of a tenancy substantial. Halving it removes a real barrier, particularly for younger tenants and new arrivals.

What to check: ask for the invoice and confirm the split. If you are presented with a commission representing the full fee, the correct response is to point to the rule rather than to negotiate.

Shared flats: colocation finally has a legal framework

Shared living is a large part of the Luxembourg rental market and, until this reform, it had almost no specific legal basis. The law now provides for it.

• A single colocation contract is concluded between the landlord and the tenants together.
• The flatmates draw up a written colocation pact setting out how communal life and the practical arrangements work between them.
• A flatmate leaving before the end of the lease notifies the landlord and the other flatmates simultaneously, with three months' notice, by registered letter with acknowledgement of receipt.
• That departing flatmate is required to look for a replacement before the notice period expires.

This structure resolves the question that used to produce most of the arguments in shared flats: what happens when one person leaves, and who carries the empty room.

The rent cap, and the end of luxury housing

The principle that annual rent may not exceed 5 per cent of the capital invested in the dwelling is maintained, and it now applies to the total of rents paid in a letting, a colocation or a multiple-lease arrangement rather than being assessed lease by lease.

The category of luxury housing has been abolished. It had allowed certain properties to escape the cap entirely, and in practice it was being applied to small and indifferently furnished units that were not luxurious by any ordinary reading. The cap now applies to all residential lettings.

A supplement may be charged for furniture where the dwelling is let furnished, which is the legal basis for the premium in the furnished segment.

Rent increases: the biennial ten per cent limit

The former rule of annual thirds has been replaced. At each adjustment, the rent may not be increased by more than 10 per cent, on a biennial basis.

If a landlord proposes an increase above that and the tenant does not agree, the tenant's route is a written objection sent by registered letter, followed if necessary by referral to the rent commission.

What every new lease must now state

The reform also tightened what the written contract has to contain, and these are useful items to check before signing.

• The designation of every room and part of the building covered by the lease, with the address and the cadastral reference.
• A statement that the rent respects the legal annual rent ceiling.
• An indication that either party may refer a dispute over the fixing of the rent to the rent commission.
• The amount of the rental guarantee, within the two-month maximum.

A lease that omits these is a lease drafted before the reform and reused. That in itself tells you something about how the property is managed.

What did not change

The government removed the wider reform of the rent ceiling from the bill before the vote, in the face of substantial opposition, and undertook to bring a revised proposal after further analysis. So the cap remains as it was in principle, and a further reform of it is still on the table. Anyone letting property in Luxembourg should treat that as a live issue rather than a settled one.

What to check on a lease you are handed today

Two years after the reform, pre-2024 templates are still circulating. Run through this list before signing anything.

• The guarantee. Two months maximum. If it says three, the clause is not enforceable on a lease concluded now.
• The agency commission. Split fifty-fifty. A clause allocating it wholly to the tenant is void.
• The rent ceiling statement. The contract must state that the rent respects the legal annual ceiling.
• The rent commission clause. The contract must indicate that either party may refer a dispute over the rent to it.
• The designation of the premises. Every room and part of the building covered, with the address and the cadastral reference.
• Any reference to luxury housing. The category no longer exists. Its presence tells you the document has not been updated since before August 2024.
• The increase mechanism. The old rule of annual thirds has gone, replaced by a biennial limit of 10 per cent.

A lease failing three or more of these is not a legal trap so much as a signal about the management. If nobody has updated the contract in two years, ask yourself who will answer the telephone when the boiler fails.

Three questions we are asked

My lease is from 2021. Which rules apply?

Contracts signed before 1 August 2024 remain subject to the previous rules on certain points, including the deposit. The reform did not retroactively rewrite existing contracts. When the lease is renewed or replaced, the current rules apply.

Can a landlord still ask the tenant to pay the whole agency fee?

Not for a lease concluded from 1 August 2024. The split is imposed by law, whoever instructed the agency, and a contrary clause is void. If you are asked, refer to the rule.

Does the two-month limit apply to a bank guarantee as well as cash?

The limit is on the amount of the rental guarantee, and the usual forms in Luxembourg are a cash deposit into a blocked account or a bank guarantee. The ceiling applies to the value of the guarantee whichever form it takes.

How we handle this

Every lease we prepare is drafted to the current law, with the required statements, a two-month guarantee and the agency fee split correctly on the invoice. If you have been handed a lease elsewhere and something in it looks out of date, send it to us before you sign.

Current availability is on our rentals page .

A stronger reading of shared flats: colocation finally has a legal framework starts by asking what would change for the resident on an ordinary weekday.

For the deposit: three months became two, ask which qualities will still matter after furniture has been moved in, the first season has passed and the household has settled into its normal schedule.