Authored by the expert who managed and guided the team behind the Luxembourg Property Pack
Everything you need to know before buying real estate is included in our Luxembourg Property Pack
Luxembourg is one of the few European countries where foreigners can buy and rent out residential property with almost no restrictions, making it attractive for international investors in 2026.
However, the combination of high property prices and modest gross yields (typically 3% to 4%) means you need to plan carefully to make your Luxembourg rental investment profitable.
We constantly update this blog post with the latest data from official sources, so you always have accurate numbers to work with.
And if you're planning to buy a property in this place, you may want to download our pack covering the real estate market in Luxembourg.
Insights
- Luxembourg's gross rental yields typically range from 2.7% to 4.2% in 2026, which is lower than most European capitals, so cashflow depends heavily on your financing costs and whether you buy with leverage.
- A well-located studio in Luxembourg City can fetch around 1,300 to 1,700 euros per month in early 2026, but the same unit in a strong commuter commune like Strassen or Bertrange might rent for 10% to 20% less.
- Luxembourg taxes your rental income even if you live abroad, so non-resident landlords must register with the Luxembourg tax system and file annual returns declaring their property income.
- Short-term rentals in Luxembourg average around 60% occupancy with nightly rates near 140 euros, but administrative obligations like guest registration forms and commune declarations make it more complex than long-term renting.
- The maximum security deposit for residential leases in Luxembourg was recently lowered to two months of rent, down from the traditional three months that many older landlords still expect.
- Vacancy rates in Luxembourg remain very low at around 2% to 6% annually for well-priced rentals, driven by steady population growth and a large expat workforce that keeps demand strong.
- Neighborhoods like Bonnevoie, Hollerich, and Esch-sur-Alzette often deliver better rental yields than prime Luxembourg City quarters because entry prices are lower while tenant demand stays solid.
- Energy efficiency ratings now significantly affect rental speed and pricing in Luxembourg, with well-insulated properties commanding noticeably higher rents and attracting tenants faster.
Can I legally rent out a property in Luxembourg as a foreigner right now?
Can a foreigner own-and-rent a residential property in Luxembourg in 2026?
As of early 2026, Luxembourg allows foreigners to purchase and rent out residential property without any nationality-based restrictions, making it one of the more open real estate markets in Europe.
Most foreign investors in Luxembourg hold rental property either directly in their personal name or through a Luxembourg-registered company (SCI or Soparfi), with the choice depending mainly on tax planning and estate considerations.
The main limitation foreigners face is not legal but practical: Luxembourg's high property prices and relatively modest rental yields mean you need significant capital or favorable financing to make the numbers work.
If you're not a local, you might want to read our guide to foreign property ownership in Luxembourg.
Do I need residency to rent out in Luxembourg right now?
You do not need to be a Luxembourg resident to own and rent out a property there, so non-resident landlords can legally collect rental income while living abroad.
However, because Luxembourg taxes rental income at source, you will need to be identifiable to the Luxembourg tax system and typically must obtain a tax identification number to file your annual rental income declaration.
A local Luxembourg bank account is not strictly required since Luxembourg is part of SEPA and tenants can pay to most EU bank accounts, but having a local account reduces friction for standing orders, deposit handling, and paying local invoices.
Managing a Luxembourg rental remotely is entirely feasible if you hire a local property manager to handle viewings, tenant communication, and maintenance, which most foreign landlords do.
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What rental strategy makes the most money in Luxembourg in 2026?
Is long-term renting more profitable than short-term in Luxembourg in 2026?
As of early 2026, long-term renting in Luxembourg is generally the safer and more predictable strategy, while short-term renting can generate higher gross revenue but comes with more operational complexity and regulatory requirements.
A typical 1-bedroom apartment in Luxembourg City might earn around 24,000 to 28,000 euros per year on a long-term lease (about 2,000 to 2,300 euros monthly), whereas the same unit on Airbnb at 60% occupancy and 140 euros per night could gross around 30,000 euros, but platform fees, cleaning, and higher turnover costs often eat into that premium.
Short-term renting tends to work best financially in Luxembourg for properties near business districts like Kirchberg, the city center, or close to major transit hubs where business travelers and relocating expats need temporary accommodation.
What's the average gross rental yield in Luxembourg in 2026?
As of early 2026, the average gross rental yield for residential properties in Luxembourg sits around 3% to 4%, which is modest compared to many other European markets.
In practice, gross yields range from about 2.7% to 3.3% in prime Luxembourg City locations up to around 3.3% to 4.2% in well-connected commuter communes where purchase prices are lower but rental demand remains strong.
Studios and smaller 1-bedroom apartments typically achieve the highest gross yields in Luxembourg because their lower purchase price and steady demand from young professionals and expats create a favorable rent-to-price ratio.
By the way, we have much more granular data about rental yields in our property pack about Luxembourg.
What's the realistic net rental yield after costs in Luxembourg in 2026?
As of early 2026, the realistic net rental yield after all costs for a typical Luxembourg rental property falls between 2.0% and 3.0%, depending on your management setup and financing.
Most landlords in Luxembourg experience net yields in the range of 1.5% on the low end (heavily leveraged, professionally managed) to around 3.0% on the high end (owned outright, self-managed, efficient property).
The three main cost categories that reduce gross yield to net yield in Luxembourg are copropriete charges and building maintenance (often 3 to 6 euros per square meter monthly), property management fees if you are remote (typically 7% to 12% of rent), and income tax on rental earnings (partly offset by deductible expenses like mortgage interest, repairs, and depreciation).
You might want to check our latest analysis about gross and net rental yields in Luxembourg.
What monthly rent can I get in Luxembourg in 2026?
As of early 2026, typical monthly rents in Luxembourg City for long-term rentals are around 1,300 to 1,700 euros (about 1,350 to 1,750 USD) for a studio, 1,800 to 2,400 euros (about 1,850 to 2,500 USD) for a 1-bedroom, and 2,600 to 3,500 euros (about 2,700 to 3,600 USD) for a 2-bedroom apartment.
A decent studio in Luxembourg starts at around 1,200 to 1,400 euros per month (roughly 1,250 to 1,450 USD) in less central but still well-connected areas.
A typical 1-bedroom apartment in a good Luxembourg City neighborhood rents for about 1,800 to 2,200 euros per month (approximately 1,850 to 2,300 USD).
A standard 2-bedroom apartment in a desirable Luxembourg location commands around 2,400 to 3,200 euros per month (roughly 2,500 to 3,300 USD), with prices varying based on condition, parking, and energy rating.
If you want to know more about this topic, you can read our guide about rents and rental incomes in Luxembourg.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Luxembourg versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
What are the real numbers I should budget for renting out in Luxembourg in 2026?
What's the total "all-in" monthly cost to hold a rental in Luxembourg in 2026?
As of early 2026, the total monthly cost to hold and maintain a typical Luxembourg rental apartment (excluding mortgage payments) ranges from about 300 to 600 euros (roughly 310 to 620 USD), covering building charges, insurance, maintenance reserves, and management fees if applicable.
Most landlords in Luxembourg should budget between 250 euros per month on the low end (owner-occupied building, self-managed) up to 700 euros or more on the high end (large apartment, full property management, older building with higher charges).
In Luxembourg specifically, the copropriete or building charges tend to be the single largest recurring cost, often running 150 to 350 euros monthly for a standard apartment, because these fees cover heating, common area maintenance, elevator service, and building reserves.
You want to go into more details? Check our list of property taxes and fees you have to pay when buying a property in Luxembourg.
What's the typical vacancy rate in Luxembourg in 2026?
As of early 2026, the typical vacancy rate for well-priced rental properties in strong-demand areas of Luxembourg is around 2% to 6% annually, which translates to roughly 1 to 3 weeks of vacancy per year in most cases.
Landlords in Luxembourg should realistically budget for about 2 to 4 weeks of vacancy per year because even in this tight market, tenant turnover requires time for cleaning, minor repairs, and finding a replacement tenant.
The main factor that causes vacancy rates to vary across Luxembourg neighborhoods is proximity to employment centers and public transit, with areas near Kirchberg, the train station, and tram lines experiencing faster re-letting than more isolated locations.
Tenant turnover in Luxembourg typically peaks in late summer (August to September) when work contracts begin and families relocate before the school year, meaning landlords with leases ending in this period usually find new tenants quickly.
We have a whole part covering the best rental strategies in our pack about buying a property in Luxembourg.
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Where do rentals perform best in Luxembourg in 2026?
Which neighborhoods have the highest long-term demand in Luxembourg in 2026?
As of early 2026, the three neighborhoods with the strongest overall long-term rental demand in Luxembourg are Kirchberg (home to EU institutions and major banks), Limpertsberg (central and popular with professionals), and Belair (a residential favorite among families and expats).
Families with children in Luxembourg tend to favor neighborhoods like Merl, Belair, and Weimerskirch within the city, as well as nearby communes such as Strassen, Bertrange, and Mamer that offer more space, good schools, and quieter streets.
Students and younger renters in Luxembourg concentrate around Belval in Esch-sur-Alzette (near the University of Luxembourg campus) and in more affordable city neighborhoods like Bonnevoie and Gare that offer good transit connections.
Expats and international professionals in Luxembourg most often seek rentals in Kirchberg, Limpertsberg, Belair, and Merl, where turnkey apartments, English-speaking services, and easy commutes to financial district offices are readily available.
By the way, we've written a blog article detailing what are the current best areas to invest in property in Luxembourg.
Which neighborhoods have the best yield in Luxembourg in 2026?
As of early 2026, the three neighborhoods offering the best rental yields in Luxembourg are Bonnevoie and Hollerich (within Luxembourg City but with lower entry prices), Esch-sur-Alzette and Belval (university-driven demand and regeneration), and parts of the Gare district (strong tenant demand with more affordable purchase prices).
In these higher-yield Luxembourg neighborhoods, gross rental yields typically range from about 3.5% to 4.5%, compared to the 2.7% to 3.3% more common in prime areas like Kirchberg or Belair.
The main characteristic that allows these neighborhoods to achieve higher yields is the combination of purchase prices that are 20% to 40% lower than prime Luxembourg City while rental demand remains robust due to good public transport, proximity to employment, and ongoing urban development.
We cover a lot of neighborhoods and provide a lot of updated data in our pack about real estate in Luxembourg.
Where do tenants pay the highest rents in Luxembourg in 2026?
As of early 2026, the three neighborhoods where tenants pay the highest rents in Luxembourg are Ville Haute and the historic city center, Kirchberg (financial district and EU quarter), and Belair and Limpertsberg (upscale residential areas).
In these premium Luxembourg neighborhoods, a standard 1-bedroom apartment typically rents for 2,200 to 2,800 euros per month (about 2,300 to 2,900 USD), while 2-bedroom apartments range from 3,200 to 4,500 euros monthly (roughly 3,300 to 4,650 USD).
The main characteristic driving these high rents is the combination of very limited housing supply in historic or highly developed areas with concentrated demand from high-income tenants who prioritize walkability, prestige addresses, and proximity to major employers.
The typical tenant profile in these top-rent Luxembourg neighborhoods includes senior professionals at EU institutions, executives at international banks and Big Four firms, and diplomats or corporate assignees on generous housing allowances.
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Luxembourg. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
What do tenants actually want in Luxembourg in 2026?
What features increase rent the most in Luxembourg in 2026?
As of early 2026, the three property features that increase monthly rent the most in Luxembourg are excellent energy efficiency ratings (A or B class), dedicated parking or garage space (especially outside the city center), and direct access to tram or train stations within a 5-minute walk.
A high energy rating (A or B class) can add a rent premium of around 10% to 15% in Luxembourg because tenants increasingly prioritize low utility bills, and landlords with efficient properties face less pushback on rent levels.
One commonly overrated feature in Luxembourg is luxury kitchen appliances or high-end finishes, as most tenants care more about functional layouts and low running costs than premium brands they rarely use.
An affordable upgrade that provides strong return on investment for Luxembourg landlords is installing smart thermostats and LED lighting throughout the unit, which costs a few hundred euros but signals efficiency and modernity to prospective tenants.
Do furnished rentals rent faster in Luxembourg in 2026?
As of early 2026, furnished apartments in Luxembourg typically rent about 1 to 3 weeks faster than unfurnished equivalents because many incoming expats and corporate transferees need turnkey solutions and cannot wait for furniture delivery.
Furnished rentals in Luxembourg generally command a rent premium of about 10% to 20% over unfurnished units, though this comes with higher wear-and-tear costs and the need to maintain and occasionally replace furniture and appliances.
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How regulated is long-term renting in Luxembourg right now?
Can I freely set rent prices in Luxembourg right now?
Landlords in Luxembourg do not have complete freedom to set any rent they want because the law ties maximum allowable rent to a percentage of the capital invested in the property, which means excessively high rents can be challenged by tenants.
Rent increases during a tenancy in Luxembourg are permitted but generally require justification (such as improvements to the property) and must follow the framework set out in the residential lease law, so arbitrary mid-lease hikes are not allowed.
What's the standard lease length in Luxembourg right now?
The most common lease length for residential rentals in Luxembourg is between 1 and 3 years, with renewal mechanics and tenant protections governed by law, though there is no single mandatory term that every lease must follow.
The maximum security deposit a landlord can legally require in Luxembourg is now 2 months of rent (approximately 3,600 to 4,800 euros or 3,700 to 5,000 USD for a typical 1-bedroom), following recent reforms that lowered it from the traditional 3 months.
At the end of a tenancy in Luxembourg, the landlord must return the security deposit within a reasonable period (typically interpreted as a few weeks to a couple of months) after deducting any legitimate costs for damages or unpaid rent, with proper documentation required for any deductions.
We made this infographic to show you how property prices in Luxembourg compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
How does short-term renting really work in Luxembourg in 2026?
Is Airbnb legal in Luxembourg right now?
Short-term rentals like Airbnb are legal in Luxembourg, but they come with administrative requirements that make them more complex to operate than simple long-term leases.
Depending on your commune and how you operate, you may need to file an advance declaration with the mayor before renting your furnished property short-term, and certain communes have additional local requirements.
Luxembourg does not have a single nationwide cap on annual rental nights like some other European cities, but the rules can vary by commune and by how your activity is classified, so checking local requirements before you start is essential.
Operating a non-compliant short-term rental in Luxembourg can result in administrative fines, and since September 2025, hosts must also complete traveller accommodation forms for guests as part of a new hospitality-style reporting obligation.
By the way, we also have a blog article detailing whether owning an Airbnb rental is profitable in Luxembourg.
What's the average short-term occupancy in Luxembourg in 2026?
As of early 2026, the average annual occupancy rate for short-term rentals in Luxembourg is around 55% to 65%, with well-managed properties in prime locations achieving the higher end of that range.
In practice, short-term rental occupancy in Luxembourg ranges from about 40% for average listings in less central areas up to 75% or more for top-performing properties in Kirchberg, the city center, or near major transit hubs.
The highest occupancy months for Luxembourg short-term rentals are typically September through November and March through June, when business travel, conferences, and corporate relocations peak.
The lowest occupancy periods are usually late December through February and parts of August, when business activity slows and leisure tourism to Luxembourg (which is modest compared to other European capitals) also dips.
Finally, please note that you can find much more granular data about this topic in our property pack about Luxembourg.
What's the average nightly rate in Luxembourg in 2026?
As of early 2026, the average nightly rate for short-term rentals in Luxembourg is around 130 to 150 euros (approximately 135 to 155 USD), with studios and 1-bedrooms at the lower end and larger or better-located units commanding higher rates.
Nightly rates in Luxembourg's short-term rental market range from about 80 to 100 euros (roughly 85 to 105 USD) for basic studios in less central areas up to 200 to 250 euros (about 210 to 260 USD) for well-appointed 2-bedroom apartments in Kirchberg or the city center.
The typical nightly rate difference between peak season (business travel months) and off-season (winter holidays, August) in Luxembourg is around 20 to 40 euros, with savvy hosts adjusting pricing dynamically to maintain occupancy during slower periods.
Is short-term rental supply saturated in Luxembourg in 2026?
As of early 2026, the Luxembourg short-term rental market is moderately saturated, meaning average listings face real competition while well-differentiated properties in prime locations still perform well.
The number of active short-term rental listings in Luxembourg has grown steadily over the past few years, with AirDNA tracking around 1,500 to 1,600 active listings, though growth has slowed as the market matures.
The most oversaturated areas for short-term rentals in Luxembourg are the historic city center (Ville Haute) and parts of Gare, where a high concentration of listings competes for a limited pool of leisure and budget business travelers.
Neighborhoods with room for new short-term rental supply include Kirchberg (where business traveler demand is strong but quality listings remain limited), Gasperich and Cloche d'Or (newer developments near offices), and areas near the airport for transit-focused stays.
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What sources have we used to write this blog article?
Whether it's in our blog articles or the market analyses included in our property pack about Luxembourg, we always rely on the strongest methodology we can, and we don't throw out numbers at random.
We also aim to be fully transparent, so below we've listed the authoritative sources we used, and explained how we used them and the methods behind our estimates.
| Source | Why it's authoritative | How we used it |
|---|---|---|
| Luxembourg Ministry of Housing (Observatoire) - Sale prices | It's the government's own housing observatory using notarised transaction data. | We used it to establish current price levels and recent trends. We also used its methodology notes to explain what the figures represent. |
| Luxembourg Ministry of Housing (Observatoire) - Rental prices | It's an official government dashboard tracking rental asking prices over time. | We used it to describe rental market trends and segment differences. We also used it to support vacancy assumptions in a tight market. |
| Observatoire - Asking rents by commune | It's an official dataset from the Ministry's housing observatory. | We used it to convert rent per square meter into realistic monthly amounts. We also used it to compare rent levels across Luxembourg communes. |
| STATEC - Le logement en chiffres (Q2 2025) | STATEC is Luxembourg's national statistics office. | We used it to support the broader market picture and recent price changes. We used it as a cross-check against the Observatoire's indicators. |
| Luxembourg residential lease law | This is the actual legal text governing residential leases. | We used it to explain landlord rights and limitations on rent setting. We also used it to ensure our guidance reflects the law, not blog wisdom. |
| Guichet.lu - Reporting rental income | Guichet.lu is Luxembourg's official administrative portal. | We used it to explain how rental income is taxed and what expenses are deductible. We used it to estimate realistic net yields. |
| ACD (Luxembourg Tax Authority) | It's the Luxembourg tax authority stating basic tax principles. | We used it to clarify that Luxembourg taxes rental income even for non-residents. We used it to frame remote landlord obligations. |
| Guichet.lu - Short-term rental declaration | It's an official page describing commune declaration requirements. | We used it to explain what legal Airbnb-style renting requires administratively. We used it to highlight that rules can vary by commune. |
| Banque centrale du Luxembourg | It's Luxembourg's central bank publishing official interest rate data. | We used it to ground financing cost assumptions that affect net returns. We used it as context for why cashflow can be tight at low yields. |
| STATEC - Population change (2025) | It's an official demographic release explaining demand-side pressure. | We used it to support the structural demand story behind rents. We used it to tailor neighborhood analysis to Luxembourg's expat dynamics. |
| AirDNA - Luxembourg market snapshot | It's a widely used short-term rental data provider with transparent metrics. | We used it to estimate occupancy and nightly rates for short-term rentals. We used it to discuss market saturation using supply and performance data. |
We have made this infographic to give you a quick and clear snapshot of the property market in Luxembourg. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.