Every few weeks a new landlord on Roomie-Radar asks us some version of the same question: "do I really need to declare this, it's just one room?" The short answer is yes, always. Most tax guidance in Luxembourg is written for someone renting out an entire flat as an investment, not for someone with one spare room in their own home. The legal framework governing shared rentals today — including the distinction between colocation and coliving — largely comes from the 2024 Luxembourg rental reform, but that reform addresses the contract, not what to do with the tax office afterwards. That's what we cover here.
Yes, without exception. Anyone who owns a rented property in Luxembourg must declare the rental income, whether they're a resident or non-resident owner. There is no threshold below which a single room is exempt — €400 or €900 a month, it's taxable from the first euro.
This catches people off guard especially when the room is inside their own primary residence, because it doesn't feel like being a "landlord" in the traditional sense. For tax purposes, it is exactly that.
Direct answer: on tax return model 100, under the category of net income from the rental of property. This amount is added to your other income — salary included — and taxed at your overall income tax rate, not a separate fixed rate.
Non-resident owners have the same obligation: income generated by a property located in Luxembourg is taxable in Luxembourg regardless of where the owner lives.
This is the part almost nothing explains properly. What's taxable isn't the gross rent, it's the net income: rent received minus deductible expenses directly tied to the rental. These include, among others:
One detail worth knowing: when maintenance costs exceed 50% of the annual rent received, they can be spread over 2 to 5 years instead of deducted all at once in the same year.
The deposit itself, when received, isn't income. But if at the end of the contract the landlord keeps part or all of it — for damages, unpaid rent, or another justified reason — that retained amount becomes taxable income in the year it's kept. It's worth documenting properly: a clear entry and exit état des lieux protects you with the tenant, and also supports the tax justification if the authorities ask questions. We cover that process in detail in the rental deposit in Luxembourg.
No, the tax treatment stays the same regardless of contract length. What does change, and it's where we see the most questions from Roomie-Radar landlords, is the administrative workload: a short-term rental of three or six months means repeating the process with new tenants more often than an annual contract, even though the tax treatment of the income doesn't change. If this is your first time considering that format, the guide to a short-term furnished room in Luxembourg covers the contract and pricing side.
None of this replaces professional advice for your specific situation, but knowing the basic rules before pricing your room avoids surprises later. Many of our landlord users tell us that once they understand what portion of the rent is actually net after deductions, they price their listing with more clarity from day one. Roomie-Radar connects landlords with qualified users searching for a room in Luxembourg, and using Roomie-Radar is free.
Renting out a room in Luxembourg creates a tax obligation from the first euro, with no exception for it being a room rather than a full flat. The good news is the system also allows a real deduction of associated expenses, which lowers the amount actually taxable compared to the gross rent.
If you're considering listing a room for the first time, understanding this before setting your price saves you surprises at tax return time. At Roomie-Radar we help landlords connect with qualified tenants simply and transparently. Start at roomie-radar.com.
1. Do I have to declare rent if it's just a room in my own home?
Yes. The obligation to declare applies to any rental income from a property in Luxembourg, including a single room inside your primary residence. There is no exception for renting part of a home rather than a whole property.
2. How much tax do I pay on renting out a room in Luxembourg?
There's no fixed percentage: net rental income is added to your other income and taxed at your overall applicable rate based on your full tax return. The final amount depends on your personal situation, not just the rent received.
3. What if I own the property but don't live in Luxembourg?
The obligation to declare still applies. Income generated by a property located in Luxembourg is taxable there regardless of the owner's country of residence.
4. What expenses can I deduct from the rent I receive?
Maintenance and repair costs, insurance premiums tied to the property, a proportional share of mortgage interest, and contributions to building reserve funds, among others. You deduct the expense actually paid during the year, not pending invoices.
5. Do I need to declare rent paid in cash?
Yes. The payment method doesn't change the tax obligation. All rent received in cash must be declared the same as rent received by bank transfer.
6. What happens if I keep the deposit at the end of the contract?
If you retain part or all of the deposit for damages or another justified reason, that amount becomes taxable income in the year it's kept. Documenting the room's condition properly with an état des lieux helps justify that retention to the tax authorities.
7. Does anything change if I rent for a few months instead of a full year?
The tax treatment of the income doesn't change based on contract length. What does increase with a short-term rental of a few months is how often you repeat the administrative process with new tenants.
8. Can I deduct renovation costs if they exceed half the annual rent?
Yes, with one detail: when maintenance costs exceed 50% of the annual rent received, they can be spread over 2 to 5 years instead of deducted in full the same year.
9. Does Roomie-Radar verify a landlord's tax situation before publishing a listing?
No. Roomie-Radar verifies published listings and connects landlords with qualified users, but the tax declaration remains the landlord's sole responsibility with the Luxembourg tax authorities.
10. Where can I find official information about this type of declaration?
At Guichet.lu and on the website of the Administration des contributions directes, which detail the forms and income categories applicable to rental income.
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