The 5% rule in Luxembourg
The Luxembourg law of 21 September 2006 caps annual rent at 5% of the reassessed invested capital. Invested capital is the purchase price plus any works, each reassessed with a STATEC coefficient by year, then reduced by an obsolescence discount (1% per year by default). Any rent above this cap can be judicially reduced at the tenant's request, with reimbursement of the excess.
Klimabonus: strong leverage for E/F/G classes
The Klimabonus scheme covers up to 65% of energy retrofit works (insulation, heating, ventilation), with an additional CO₂ premium based on actual savings. A property upgraded from F or G to B typically sees its market value jump and its legal rent rise via the reassessed works added to invested capital.
Gross yield vs maximum legal yield
Many landlords overlook that in Luxembourg the maximum gross yield is mechanically capped at 5% by law. Above this, the lease is legally exposed. Our tool compares your current rent against the legal cap in real time and alerts you if you are out of bounds — a compliance safety net to avoid disputes.
Use by property managers
Property managers and rental operators (10-100 units) use this tool to run portfolios on behalf of third parties: compliance checks at each lease renewal, post-works impact simulation, identification of Klimabonus-eligible units.
Frequently asked questions
Is my rental data sent online?
No. All units are stored in your browser's localStorage. No data leaves your machine. If you change device, export your portfolio beforehand.
Can I apply an obsolescence rate other than 1%?
The law does not fix an exact rate. 1%/year is the usual court standard, but a landlord can argue for a lower rate if the property was recently renovated. Keep invoices — they form part of the reassessed invested capital.
How are reassessment coefficients computed?
Coefficients are taken from STATEC's construction price index publications. Our table covers every year from 1960 to today. The older the purchase year, the higher the coefficient.
Does furnished rental change the calculation?
Yes. A 10% uplift on the maximum rent is accepted for furnished rentals. Tick the option in the unit form — the legal cap is adjusted automatically.