Can I raise my tenant's rent whenever I want?
No — rent is not something you raise at will. The rent of an unfurnished home may only be adjusted once every two years, and since 1 August 2024 (law of 23 July 2024) each adjustment is capped at 10%. Above that sits an absolute ceiling: annual rent may never exceed 5% of the capital invested, revalued and then discounted — in practice, capital invested ÷ 240 per month. The myth: many landlords believe they can index the rent to inflation every year, or simply align it with "the market price". Wrong on both counts: the 2006 law bans indexation clauses, and the ceiling is calculated on the capital actually invested, not on what the property is worth today.
📋 The rules
- Absolute legal ceiling: the annual rent of an unfurnished home may not exceed 5% of the capital invested (art. 3, amended law of 21 September 2006). The official formula: maximum monthly rent = capital invested ÷ 240.
- Frequency: rent may only be adjusted once every two years (24 months minimum). A landlord may wait longer — never less.
- Cap per adjustment: since 1 August 2024, an increase may not exceed 10% per adjustment. This two-yearly limit replaced the old "rule of annual thirds".
- Capital invested: revalued using an official coefficient, then discounted by 2% for every additional two-year period once the home is 15 years old or more. The burden of proving the capital invested falls on the landlord.
- Furnished lets: the supplement for furniture may not exceed 1.5% per month of the total value of the invoices — and only invoices less than 10 years old count.
🔓 Exceptions
- Social rental housing run by the Fonds du logement, the SNHBM and the communes falls outside the 5%-of-capital ceiling.
- The two-year clock is reset by a change of tenant — but not by a change of owner. Buying the building does not restart the clock.
- Relative nullity: the rent-setting rules protect the tenant only. If a tenant freely agrees to pay above the ceiling, he cannot later claim a retroactive refund of rent he paid voluntarily.
⚠️ Penalties & fines
There is no criminal fine: the sanction is civil and silent. If the increase exceeds the ceiling and the tenant objects by registered letter, the excess ceases to be owed from the first instalment following the objection, and anything overpaid after that must be refunded. The real exposure lies elsewhere: either party may refer the matter to the rent commission, which can recalculate the capital invested from the documents. A landlord who cannot produce deeds and invoices — and the burden of proof is his — sees his maximum rent set lower, and durably so. Rent claims are time-barred after 5 years.
📎 Official sources
- Guichet.lu · official state portal (home page) — "Concluding a residential lease" →
- Logement.lu · Ministry of Housing (home page) — tenancy FAQ and the "legal rent ceiling" brochure →
- Legilux · official journal (home page) — law of 23 July 2024 and amended law of 21 September 2006 →
❓ Frequently asked
Can I index the rent to inflation every year?
No: the 2006 law prohibits indexation clauses in a residential lease. The clause survives only as long as the tenant puts up with it, and it stops producing effect as soon as he objects by registered letter.
How is the maximum legal rent calculated?
You divide the capital invested — revalued, then discounted by 2% for every two years beyond fifteen years of age — by 240. The result is the maximum monthly rent, and it is the landlord who must prove the capital invested.
I have just bought the building: can I raise the rent now?
No, a change of owner does not reset the two-year clock, and the previous landlord's last adjustment still counts against you. Only a change of tenant brings the current two-year period to an end.
What if the tenant accepted an increase that was too high?
The rent-setting rules protect the tenant alone, so a tenant who freely paid above the ceiling cannot claim a retroactive refund. He can, however, stop the excess for the future by objecting in writing.
Is the 5% ceiling being cut to 3.5%?
Property blogs say so, but no official document confirms that figure. A reform of the rent cap has been under study since April 2026: nothing has been voted and no rate has been set.
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