Buying a house or an appartment in Luxembourg

Investing in real estate in Luxembourg

Renting your home is often a natural choice when relocating to a new country. However some specific elements should incentivise you to quickly become homeowner in Luxembourg, even if you only consider living several years in Luxembourg!

First of all, do you know that more than 67% of residents in Luxembourg own their homes? Why such a percentage while real estate prices are high?

Taxes related to home ownership are favourable in Luxembourg

Transaction costs are limited

In Luxembourg, when purchasing a property, notarial deeds are subject to fees amounting to 7% of the property price, of which 6% are registration fees and 1% are transcription fees.

In order to encourage personal property acquisition, these costs are reduced to €100 (Bëllegen Akt) for any first purchase of the main residence in Luxembourg, up to €285,714 for a single person or €571,428 for a couple. This represents a tax gift of up to 20,000 euros per head or 40,000 euros for a couple, provided you live more than 2 years in your new residence. But nothing prevents you from renting this property beyond these 2 years, without this tax benefit being called into question.

Notary fees are also relatively limited on the transfer of ownership. More information about these registration fees.

Property tax is practically non-existent

In comparison to other neighbouring countries, the property tax is very low in Luxembourg. Being owner does therefore not generate a significant tax pressure that might justify remaining a tenant.

The capital gain is tax-exempt

Similarly to most countries, the potential capital gain realised on the sale of the primary residence is non-taxable. Whatever the amount might be.

Mortgage interests are tax-deductible

A couple can benefit from up to €10,000 of deductible loan interest (+ €2,000 per child) annually on the purchase of a property, regardless of its destination. The deductibility of mortgage interest therefore makes the cost of borrowing very attractive in relation to the cost of renting.

On the basis of these elements, it seems important to us to consider the question of buying your main residence, as soon as you know that you will stay more than 2 years in Luxembourg! To calculate how many years it is more interesting to buy than to rent on the basis of your personal situation, there are calculation tools such as on the website.

Significant growth for Luxembourg property market and resilience to crises

  • A thriving economy in the centre of Europe
    With a strong track record and a forecast of 4% annual growth in GDP (source World Bank), the Luxembourg economic development surpasses the performance of its neighbours.
  • A steady increase of the population
    With a forecasted 2.2% annual growth (source World Bank), the increase in population results in a surge in housing demand.
  • An insufficient number of new constructions
    The annual deficit in new homes is estimated to reach 3,000 units based on the number of delivery of new dwellings (source STATEC).
  • A real estate market that demonstrated its resilience in case of crises
    Property prices have been marginally impacted by the 2008 financial crisis (1% decrease in 2009 followed by a steady increase of +/- 5% since 2010).

Do you know crowdinvesting? Invest in real estate in Luxembourg thanks to crowdfunding

Are you ready to invest? Why buying a new or existing property? Here are the intermediaries who can help you find the property of your dreams.

Do not forget to read our advice to prepare your real estate visits.

The only point that should make you opt for renting before buying is the need to know better your new country in order to know in which city or district of Luxembourg you might move in! Our little guide to the districts of the City of Luxembourg should already help you to choose.