On January 1, 2024, several changes will come into effect in Luxembourg. Here are the changes between salaries, state support, housing and mobility.
Big tax cut from January 1st!
Very good news for workers and pensioners in Luxembourg: MEPs voted this Wednesday, 20 December promised tax cuts for 2024.
From the 1st of January the tax rate will be adjusted, which allows for a tax reduction of approximately 10%. This scale adjustment, first developed by the Bettel government at the tripartite spring meeting, was refined by the new Frieden government.
Of the eight indices that have decreased since 2017 but have not been applied to the tax scale, four will be caught up by January 1, 2024. A more favorable adaptation than economic tax credit entered into force in July. Come January, the last one will disappear from your paycheck, because it is replaced by this new, more favorable tax rate.
In this article, you will find out how much you will save every month.
New index planned for 2024
State inflation estimates predict new index in 2024. According to the latest calculations, salaries and pensions will increase by 2.5% in the summer, during the 3rd quarter.
Use our calculator to estimate your next gross indexed salary.
The CO2 tax is increasing again
As announced by the Luxembourg government in your climate plan, the CO2 tax increases again January 1 this year. It will increase from €30 to €35 per tonne of carbon. That’s an increase of a few cents for every liter of fuel: around 1.2 cents per liter of diesel compared to 1 cent per liter of petrol. Heating fuel is also affected.
Also read – Here’s how much the carbon tax is costing you in Luxembourg
Small discount with CO2 tax credit
The tripartite of March 2023 resulted in new help for workers and pensioners: CO2 tax credit. This one is coming “to offset the cost of the CO2 tax for the lowest wages” then the government justified. It will be implemented from January 1, 2024.
According to the calculations made for the bill, a worker with the minimum social wage (EUR 3,085.11 gross) will receive €14 per month thanks to the CO2 tax credit.
Then the amount of this “CI-CO2” decreases. A worker who earns €5,000 gross per year will therefore only have €7 per month. And less than €2 per month for those whose salary is at least €6,250 gross. The CO2 tax credit is not granted above €79,999 per year.
Housing: the government promises to act quickly
The November 2023 coalition agreement lists several measures that will have to be in place “to stimulate the residential construction market in the short term” in Luxembourg. Including:
- accelerated depreciation rate for housing intended for rent,
- reduction of tax on capital gains,
- an increase in the “Biljægen Akt” tax credit for the purchase of your main residence,
- and Billiggen Akt for rental investments by individuals
- owner-occupiers who take out a property loan will be able to deduct more of the annual interest on their tax return.
The price of electricity remains regulated in Luxembourg
Spring 2023 tripartite measures, electricity price control remains in place in 2024. The government plans to keep prices at the 2022 level until the end of 2024.
The government also plans to extend until the end of June 2024 the support regime for companies particularly affected by the rise in energy prices caused by Russian aggression against Ukraine.
The meal ticket increases to €15
From 1 January 2024 value a meal ticket could reach €15 in Luxembourg, compared to €10.80 in 2023. The increase obtained without changing the share paid by the employee. Those who benefit from it in Luxembourg will continue to pay €2.80.
The big news is that the 2024 version of the voucher can be used more widely to buy food from traders – and not just your ‘food’ – and will be usable after work, at the weekend and even on holidays. not only at lunch time.
Finally, the paper meal ticket is becoming electronic. It takes the form of a credit card or appears directly on the mobile phone screen. It is more practical for everyone: the employee, the boss and the restaurateur or merchant when paying money.
Remote work: finally equality for all cross-border workers
From the 1st of January German cross-border workers will (finally) be on par with Belgians and French. Thanks to the latest agreements signed between the two countries they spend 19 to 34 days teleworking per year without tax consequences.
Taking into account the European Framework Agreement, which entered into force on 1 July 2023, cross-border workers will have two limits to comply with:
- 34 days by taxing their income
- 49% of their annual working time to remain members of the Luxembourg social security
Hidden double taxation: deferment for French cross-border workers
PUSH hidden double taxation of cross-border workers who have an income in France and Luxembourg has been suspended again for 2023. Enough to allow themavoid a large tax increase when declaring that they will finish in the spring of 2024. However, this correction is temporary and their situation is not clearly resolved in terms of income for 2024.
Extension of the tram to the National Stadium
PUSH tram line it will be completed on its southern part in 2024. According to Luxtram, the last five stops up to the Stade de Luxembourg will be operational within the year. This includes the following five tram stations in this Bonnevoie-Cloche d’Or section:
- Scyllas
- Howald Station (interchange)
- Vauban High School
- Wasserturm
- Stadium (interchange hub)
On its northern part towards Findel
More expensive train subscriptions for French cross-border workers
In 1ahem January, “TER Fluo subscription price will increase by 3%” informed the SNCF. An increase that therefore affects French cross-border workers, as they always pay for the French part of their journeys.
However, the price increase will only affect the rail part of subscriptions that combine trains and public transport. For the latter, the city districts decide on possible price increases.
Electric car: premium changes in 2024
A notable change in the country’s mobility policy: after December 31, 2023 (the date for their first entry into circulation), hybrid cars will no longer be eligible for the bonus for purchasing an electric car.
The premium will remain €8,000 for 100% electric cars. AND “Subsidies for the purchase of electric cars and other emission-free technologies will be maintained” the government promises in the coalition agreement. In this case, they were extended until the end of June 2024.
Also read – Electric car: can cross-border commuters get this €8,000 Luxembourg bonus?
Holidays: the price of tolls will increase in France
On the way to holidaymany Luxembourgers will have to pay a the bill increased in 2024. The annual increase in French tolls will “less than 3%” in 2024, assured Transport Minister Clément Beaune. It will apply from February 1.
Fewer risks for the driver’s license of French cross-border workers
From January 1, 2024, road users in France will not lose license points for speeds below 5 km/h. “Minor” speeding, less than 5 km/h, will only be punished by a fine. from January 2024. However, the fixed fine from 68 to 135 euros (depending on the place of the offense) remains.
The reduction of one license point will only apply to speeds between 5 km/h and 20 km/h.
The new law on sports leave
Deputies voted for better regulation in 2023 sports leave. The law comes into force on January 1 and more explicitly controls who can benefit from it and under what circumstances.
Also read – Public holidays, long weekends… When to take a holiday in Luxembourg in 2024
Multicultural program: the law is changing
The intercultural coexistence program replaces the current admission and integration contract and the supported integration path, systems designed by the Ministry of the Family for facilitate integration especially through courses and workshops. “So it doesn’t matter whether you are a refugee, a newcomer, a foreigner with a long-term stay, a cross-border worker or a Luxembourger, everyone can participate in all programs, activities and projects equally.” explains Minister Max Hahn.
The law also creates a higher council for intercultural coexistence, which participates in the implementation of intercultural coexistence.
Building for homeless seniors
In its coalition agreement, the new Frieden-Bettel government aims for the structure for the aging homeless to welcome its first residents in January 2024.
Sustainable finance: an update in 2024
Luxembourg, a champion of sustainable finance where it claims initiative and leadership, promises to update its national strategy in 2024.