Invest in real estate in Luxembourg
Invest in real estate in Luxembourg

Invest in real estate in Luxembourg

Invest in real estate in Luxembourg: Inflation on the euro currency market is higher than the interest yield.

Among the solutions available to diversify your investment, investing in rental properties offers a range of benefits. 

If you want to invest your cash somewhere, one option to consider is investing in real estate.

With this solution, you will be able to:

  • Build your wealth, which can be given to your descendants
  • Earn extra and regular income if you rent your property for a longer period.
  • A few years later when you sell your property a potential capital gain is realized, which can later be reinvested into real estate.

Is it a good idea to invest in real estate in Luxembourg?

The return on a real estate investment depends on several factors:

Purchase price

  • Property Type (Apartment / House, New, Old or Renovated)
  • its location
  • Average rent charged for this type of property
  • Your tax rate.

Although Luxembourg’s high property prices eat away returns, investing in property is still an attractive option:

The return on investment is higher than traditional savings schemes, for which rates are currently at a record low

You can expect to receive capital gains. Compared to other countries of the European Union, house prices in Luxembourg are higher than other countries in the European Union (1.8% per year since 2010) (on average 4.9% per year since 2010) compared to other countries in the EU (1.8%). Year 1.8%)

Given the strong demand for housing, the risk of vacant property between two tenants in Luxembourg is relatively low

Purchase costs and property taxes are relatively low compared to neighboring countries

You can take advantage of various schemes in Luxembourg regarding property taxation

What are the tax implications of rental property investment?

You will be taxed on the rent received for a property in Luxembourg during the tax year in Luxembourg.

For properties located abroad, you will pay tax in the country concerned. However, any rental income from other properties abroad will be taken into account in calculating your tax rate in Luxembourg. The tax rate thus received is utilized to taxable income in Luxembourg.


  • As a Luxembourg tax resident or equivalent, depreciation of your assets may allow you to reduce your taxable income base.
  • Depreciation is calculated based on the purchase or construction value of the property (excluding land costs) and any registration fees and VAT.
  • The purchase price and any additional costs constitute the total cost of acquisition. Post-purchase costs are also added to this total.
  • If the value of the land is unknown, unless otherwise determined, it is possible to pay 20% of the cost to acquire the building.

Should you hire or purchase real estate in Luxembourg?

Some buyers may be discouraged from purchasing real estate in Luxembourg due to the costs involved. While the market is no longer booming, house prices are high in the form of transaction fees.

While government assistance is available to some home buyers, house deposits in Luxembourg are about 20–25% higher. You also have to take into consideration the additional property tax above the purchase price.

The average price per square meter of property in Luxembourg is around € 4,518. According to government figures, a studio flat in Luxembourg is priced at around € 250,000, a two-bedroom apartment is around € 395,000, and a four-bedroom family home is priced at € 665,000.

Capital gains tax also applies if you sell your property within two years. However, if you sell your property after two years, the amount reduces to half. Thus foreigners with short-term investment plans can rethink the benefits of purchasing property in Luxembourg.

How to Invest in real estate in Luxembourg

Properties in Luxembourg are usually listed in newspapers and online property portals. However, you are unlikely to see many homes outside the sale signs.

Build your house in Luxembourg

With high property prices, some home movers choose to build their own homes. The process of building your own house follows the same system as buying an existing property. First of all, you need to find and legally purchase a plot before hiring an architect or construction company to build the property. 

Mortgaging in Luxembourg and getting help

There are many types of loans and grants available to buy real estate in Luxembourg. Your eligibility depends largely on your circumstances, so it is a good idea to contact the Housing Assistance Department to see if you are eligible.

If you are finding it difficult to obtain a mortgage, it may be possible to obtain a state guarantee. You can find more information about the State Guarantee and the application form in French and German on the official website.

It may also be possible to obtain a grant from the state for between € 250 and € 9,700 when purchasing a new-build or existing house. The amount you can get depends on your income, and you may be turned down if you can buy a property using your resources.

Buy real estate in Luxembourg

Legal requirements

When you agree to buy a house, you will sign a contract (Promesse de Vente / Vertrag). The agreement includes the names and addresses of both parties, a description of the sale of the property, and payment terms, such as a break clause if you cannot secure a mortgage. Your contract often includes the date you will occupy the house.

The sales agreement must be registered with the Registration Administration within three months of agreeing on the transaction. The contract is a legally binding document; If the purchase fails, the erring party may be subject to legal action.

Funding for Shopping: Deposits and Mortgages 

Luxembourg is a major financial center, although only a small percentage of banks deal with day-to-day or small investment banking. Most banks offer mortgages, although some insist that you already have a current account with them.

Once you have received a mortgage offer in principle, you will have to pay by a surveyor to evaluate the property, which must then be approved by the mortgage lender. Once you have agreed to purchase the property, you will also have to pay a deposit. How much deposit you pay will depend on the mortgage deal you have secured, but it is not uncommon to pay a deposit of up to 25%.

A notary (otherwise known as a bearer) is required to administer all property transactions. The notary fee is fixed by law and is about 1.5% of the value of the property.

Registration tax will be one of your biggest expenses when purchasing a home. The registration tax is 6% of the value of the property, with an additional 1% transcript tax added on top. This fee only applies if you exceed the tax-free allowance of € 20,000.

Finally, landlords in Luxembourg, Europe also have to pay an annual property tax of up to 8%, depending on which country you live in.

Know everything about Luxembourg and things to check before you plan to Invest in real estate in Luxembourg at


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