The Act of 22 May 2024 introducing a package of measures to stimulate the housing market (hereinafter referred to as " the law ") introduced a new rent subsidy for employees.

In order for employees to benefit from the 25% rent subsidy exemption, several criteria must be met:

• Employees aged under 30 at the start of the tax year are eligible for the exemption;
• The amount paid by the employer cannot exceed the amount paid by the employee in rent;
• The 25% exemption is capped at €1,000 (i.e. if the employer pays a rent subsidy of €2,000, the 25% exemption only applies up to the maximum monthly amount of €1,000);
• The gross annual remuneration, including all emoluments and benefits, but excluding the rent subsidy, of the employee to whom the rent subsidy is paid does not exceed thirty times the minimum monthly social wage for qualified workers.

A A Grand-Ducal regulation of 22 May 2024 specifies the procedures for granting this rent subsidy and calculating the exemption.

It is up to the employer to check that the conditions entitling the employee to the exemption have been met, and it is up to the employee to provide the employer with proof enabling it to carry out the checks.

In the case of incomplete remuneration or part-time work, the maximum monthly amount of the rent subsidy eligible for exemption " is to be calculated as the fraction corresponding to the ratio between the number of hours actually worked in the month and the number of hours for which the same employee would have been remunerated if he had worked full time for the whole month". ”.

The law applies retroactively from 1^st January 2024 and the Grand Ducal regulation came into force on 1^st June 2024.