The LDF for 2025 took effect on February 16: What are the main measures affecting INDIVIDUALS?

Differential Tax on High Incomes

  • High income = either €250,000 for a single person or €500,000 for a couple
  • For a tax rate of less than 20%
  • The idea is to tax the taxable income at a rate of at least 20 percent. Therefore, if the overall income tax rate calculated on the adjusted taxable income is <20 percent, the contribution is equal to the additional income tax needed to bring the rate up to 20 percent.
  • Applicable to 2025 income
  • A 95% down payment is due between December1 and 15, 2025

Income Tax

The income tax schedule has been revised and indexed to inflation: +1.8%

Additional deduction of €100,000 for cash gifts to family members

  • 100,000 euros available for each child, grandchild, great-grandchild,
  • Terms and Conditions:
    • The donated amount must be used within 6 months to purchase a new building or a building under construction, or to fund energy-efficiency renovation work.
    • For a primary residence or a property used as a primary residence for 5 years.
    • The gift must consist exclusively of a sum of money.
    • The donee may not receive more than 300,000 euros under this exemption (for example, 100,000 euros from both parents and one grandparent, but no more than that)
  • If there are no children, this provision may benefit nephews and nieces.
  • Applicability: Applies to amounts paid between February 16, 2025, and December 31, 2026.
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Furnished Rentals: Elimination of the Tax Break

  • Taxation on capital gains from the sale now includes depreciation, which was previously deducted from rental income.
  • Housing units located in certain assisted living facilities, university housing, nursing homes, or facilities for people with disabilities are not affected
  • Effective Date: February 16, 2025

Transfer Taxes on the Sale of Real Property

  • Tax reduction: May be approved by the departments for the first purchase of a home, provided it is acquired as a primary residence for at least five years
  • Increase in transfer taxes, up to +0.5 points: may be approved by the departments for property purchases made betweenApril 1, 2025, and March 31, 2028. However, this does not apply to the first purchase of a home acquired as a primary residence.

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