Guides · Renting

The legal rent cap and rent increases

Luxembourg caps rents by law: in one year, a landlord may not charge more than 5% of the capital invested in the home. Here is how the cap is worked out, when rent can go up, and how to challenge a rent you think is too high.

The rule: 5% of the capital invested

The yearly rent, without charges, may not exceed 5% of the capital invested in the home. Per month, that is the capital divided by 240.

The capital invested is made up of:

the value of the land;
the cost of building the home and its outbuildings;
the cost of improvement works.

When a landlord bought the home, the purchase price plus the deed costs is presumed to be the capital invested. The law also allows the land to be counted at a flat rate; the Ministry's brochure explains how.

Adjustments to the capital

Inflation. The capital is revalued with the coefficients the tax administration publishes for income tax, so older purchases are brought up to today's money.
Older buildings. From 15 years of age, the revalued capital (without the land) is reduced by 2% for each further 2 years. Proven maintenance spending offsets this reduction.
Furniture. For a furnished home, the landlord can add up to 1.5% a month of the furniture's purchase invoices, for furniture less than 10 years old.
Flatshares and rooms let separately. All rents together may not exceed the cap for the whole home.

A worked example

Say the capital invested, after revaluation and any age reduction, is €600,000.

Maximum yearly rent: 5% × €600,000 = €30,000
Maximum monthly rent: €600,000 ÷ 240 = €2,500, plus charges

When rent can go up

At most once every 2 years. A new landlord does not restart the 2 years; a new tenant does.
At most +10% each time. If you object by registered letter, you do not owe the part above 10%.
Never above the cap, whatever the lease says.
Indexation clauses that depart from the law stop applying from the payment after the tenant objects by registered letter.

Challenging your rent

Tenants and landlords can both ask for the rent to be checked.

Tell the other side in writing and wait 1 month.
If you don't agree, file a request with the rent commission (Commission des loyers) through your commune's college of mayor and aldermen.
The commission's decision can be appealed to the justice of the peace.

A reform is being studied

In April 2026 the Ministry of Housing published studies on reforming the cap, including limiting the yearly revaluation of the capital and adding criteria such as size, quality and energy performance. No bill has been filed yet. This guide will be updated if the law changes.

Last checked 7 October 2026. This guide is general information, not legal advice. For your situation, ask a lawyer, a tenants' association or your commune.

Sources: Lease law of 21 Sept 2006, consolidated text of 1 Aug 2024, arts. 3, 5 and 10 · Ministry brochure: Le plafond légal du loyer · Government news, 17 April 2026