Last update
New in 2021
The year 2020 was an exceptional year, due to the COVID-19 pandemic, many draft laws had to be postponed to a later date. Please consult the website covid19.lu for more information regarding the current measures in place: www.covid19.lu.
Several new legal and regulatory provisions applying directly to citizens will enter into force in 2021.
Below is an overview of the main changes that will directly impact citizens. This list is not exhaustive.
© SIP
The REVIS and the social minimum wage will increase
Entry into force: 1 January 2021
From 1 January 2021, the social minimum wage will be increased by 2.8%. The social inclusion income (REVIS) will also be increased by 2.8%.
Summary of the work of the Government Council as at 20 November 2020 (French)
Cost-of-living benefit
Entry into force: 1 January 2021
In 2021 low-income households will be entitled to a cost-of-living benefit. The maximum amounts of the cost-of-living benefit are increased by ten per cent.
Summary of the work of the Government Council as at 20 November 2020 (French)
Brexit
Entry into force: 1 January 2021
On 24 December 2020, an agreement was reached with the United Kingdom. From 1 January 2021, this agreement will determine the rules applicable to relations between the United Kingdom and the European Union in a number of areas.
More information here
Measures to facilitate the energy transition:
Entry into force: 1 January 2021
Introduction of the polluter-pays principle and strengthening of measures to support ecological transition
Like many European countries, Luxembourg has decided to introduce a minimum price for carbon from the year 2021. This polluter-pays principle is one of the measures provided for by the 'Plan national intégré en matière d’énergie et de climat du Luxembourg' (PNEC) which aims to achieve the objectives of the Paris agreement.
The minimum carbon price applies to fuels (petrol and diesel) as well as heating oil and gas. By taking into account the climate cost of fossil fuels, it will help to accelerate the transition to CO2-free mobility and heating systems powered by renewable energies, thus accelerating the ecological transition and improving air quality. The polluter-pays principle will thus create a system where the costs of pollution reduction measures are borne by the polluter.
Complete redistribution of the income generated: a solidarity measure in favor of ecological transition
Targeted use of the revenues will ensure that the carbon price is solidarity-based. Thus, revenues will be distributed in a balanced way to finance concrete measures to combat climate change and fiscal and social measures which, in the interests of social equity, will directly target low-income households: tax credits for employees (CIS), pensioners (CIP) and self-employed (CII) will increase from €600 to €696 from 1 January 2021. In addition, the cost-of-living benefit will be increased by 10% from the same date.
The other part of the revenue will be used for ecological transition measures.
Super-reduced VAT rate of 3% for energy efficiency renovation
In order to encourage home owners to carry out sustainable energy efficiency renovations, the minimum age of the building required for the application of the super-reduced VAT rate of 3% is reduced from 20 to 10 years.
6% depreciation rate for owners of a rented accommodation
For owners of a rented property, a depreciation rate of 6% is granted for 10 years for any investment in energy efficiency renovation, benefiting from financial aid under the "Clever wunnen" scheme.