A real estate investment trust (REIT) is an entity that is dedicated to investments in domestic or foreign real property and benefits from a set of dedicated tax rules. The tax rules generally provide for quasi-tax neutrality at the REIT level combined with mandatory distributions of the real estate-related income subject to a withholding tax in the country in which the REIT is established. Luxembourg law does unfortunately not provide for a REIT regime.

Despite the absence of a bespoke REIT regime, Luxembourg offers a wide range of other legal products to initiators, promoters or sponsors in the real estate investment business. Even though, these rules are not specifically tailored to real estate investments, they are suitable to acquire, develop and hold Luxembourgish or foreign real estate property. As a matter of fact, foreign REITs often opt, for a number of commercial reasons, for Luxembourg acquisition or holding vehicles, which then acquire real estate assets.

In this chapter, our experts cover: the organisation of Luxembourg real estate investment structures and its subsidiaries, key regulatory requirements, scope of activities and investments and updates and trends.

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Real Estate Investment Trusts

Luxembourg Chapter