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 welcomes foreign property buyers with open arms - there are absolutely no restrictions based on nationality.
As of June 2025, the Luxembourg real estate market remains one of Europe's most stable and attractive destinations for international investors. Whether you're from the EU, US, Asia, or anywhere else, you have the same property rights as Luxembourg citizens, including full freehold ownership. The process is straightforward but requires careful planning and understanding of local regulations.
If you want to go deeper, you can check our pack of documents related to the real estate market in Luxembourg, based on reliable facts and data, not opinions or rumors.
Foreign nationals face no legal restrictions when buying property in Luxembourg, making it one of Europe's most accessible markets for international buyers.
The total cost of purchasing property includes 7% transfer taxes plus approximately 1% notary fees, though first-time buyers can benefit from tax credits up to €40,000 per couple.
| Aspect | Details | Key Points |
|---|---|---|
| Foreign Ownership Rights | No restrictions | Same rights as locals, full freehold ownership |
| Residency Required | No | Can buy remotely with power of attorney |
| Mortgage Availability | Yes, for foreigners | Up to 80-100% LTV, rates around 3.5-4.1% |
| Total Purchase Costs | 8-10% of property price | Includes all taxes and fees |
| Average Price Luxembourg City | €11,815/m² | Highest in Belair at €14,308/m² |
| Rental Yields | 3.1% gross average | Net yields typically 1.5-2% after costs |
| Process Duration | 2-3 months | From offer acceptance to final deed |
Can I legally buy property in Luxembourg as a foreigner without any nationality restrictions?
Yes, you can freely purchase property in Luxembourg regardless of your nationality or country of origin.
Luxembourg maintains one of Europe's most open property markets for foreign buyers. Whether you're an EU citizen, American, Asian, or from any other region, you face zero legal restrictions or quotas when purchasing real estate. Both residential and commercial properties are available to foreign buyers with the same ownership rights as Luxembourg citizens.
Foreign nationals enjoy full freehold ownership rights, meaning you own the property and land outright with no time limits or special conditions. The Luxembourg government doesn't discriminate between local and foreign buyers in terms of property rights or purchasing procedures.
As we reach mid-2025, this open policy continues to attract international investors seeking stable European real estate investments. Unlike some neighboring countries that impose restrictions on foreign ownership, Luxembourg's approach remains refreshingly straightforward.
It's something we develop in our Luxembourg property pack.
Do I need residency or a special visa to purchase property in Luxembourg?
No residency permit or visa is required to buy property in Luxembourg - you can purchase as a complete non-resident.
Property ownership in Luxembourg is completely separate from residency rights. You don't need to live in the country, hold any type of residence permit, or obtain a special investor visa to complete a property purchase. Many international buyers own Luxembourg real estate purely as investments without ever residing in the country.
However, it's crucial to understand that buying property doesn't automatically grant you the right to live in Luxembourg. If you plan to move to the property after purchase, you'll need to follow standard immigration procedures based on your nationality and circumstances. EU citizens have freedom of movement, while non-EU citizens must apply for appropriate residence permits.
The separation of property rights from residency rights offers flexibility for international investors who want to diversify their portfolio without relocating. You can own, rent out, and later sell Luxembourg property while living anywhere in the world.
Can foreigners get mortgages in Luxembourg and what are the current rates and requirements?
Yes, Luxembourg banks actively provide mortgages to foreign buyers, though terms vary based on residency status.
Major Luxembourg banks including BGL BNP Paribas, Spuerkeess, ING Luxembourg, and Raiffeisen offer mortgage products to international buyers. As of June 2025, variable interest rates hover around 3.76%, down from a peak of 5% in late 2023. Fixed rates for 10+ year terms average 3.47%, with some banks offering 30-year fixed-revisable loans at approximately 4.1%.
| Buyer Type | Maximum Loan-to-Value | Typical Requirements |
|---|---|---|
| First-time buyers | Up to 100% | Proof of stable income, clean credit history |
| Non-first-time buyers | Up to 90% | 20-30% deposit recommended |
| Buy-to-let investors | Up to 80% | Rental income projections required |
| Non-EU residents | 60-80% | Higher deposit, international credit reports |
| Self-employed | 70-80% | 3 years of financial statements |
| Company directors | 80-90% | Personal guarantees often required |
| Retirees | 50-70% | Proof of pension income |
To improve your mortgage approval chances, prepare a substantial down payment (20-30%), demonstrate stable documented income through payslips or tax returns, maintain a good credit history, and consider working with a mortgage broker familiar with international clients. Banks typically charge application fees ranging from €250-€1,000, plus property appraisal costs of €300-€500.
What are all the taxes, fees, and hidden costs when buying property in Luxembourg?
Expect to pay 8-10% above the purchase price in taxes and fees, though first-time buyers can benefit from significant tax credits.
The main upfront costs include a 6% registration tax and 1% transcription tax, totaling 7% in transfer taxes. Luxembourg City properties may incur an additional urban surtax, pushing total transfer taxes to 10%. Notary fees are regulated at approximately 1% of the purchase price.
First-time buyers purchasing their primary residence can claim the Bëllegen Akt tax credit of up to €20,000 per person (€40,000 per couple), which can substantially reduce or even eliminate registration taxes. This makes Luxembourg particularly attractive for young families entering the property market.
Hidden costs often catch buyers off guard: mortgage application fees (€250-€1,000), property inspection (€500-€1,200), bank guarantee fees, insurance premiums, currency exchange costs for non-euro buyers (0.5-2%), utility connection fees, and potential co-ownership charges for apartments. While real estate agent commissions are typically paid by sellers, these costs are often factored into the asking price.
Annual ongoing costs remain modest, with property taxes typically under €100 per year for houses, varying by commune. When selling, expect to pay capital gains tax if the property isn't your main residence or hasn't been held long enough to qualify for exemptions.
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What's the complete step-by-step process to buy property in Luxembourg?
The property purchase process in Luxembourg follows a structured path that typically takes 2-3 months from offer to completion.
- Property Search: Begin on portals like athome.lu, immotop.lu, or Wortimmo.lu. Work with local real estate agents who understand the market dynamics.
- Make an Offer: Once accepted, sign the preliminary sales agreement (compromis de vente). This legally binding contract requires a 10% deposit.
- Due Diligence Period: Your notary checks property title, outstanding debts, building permits, and legal compliance. This crucial step protects your interests.
- Mortgage Application: Submit required documents including proof of identity, income verification, bank statements, and property details. Banks typically take 2-4 weeks to process applications.
- Final Contract Preparation: The notary drafts the final deed (acte de vente) incorporating all legal requirements and calculating exact taxes and fees.
- Signing Day: All parties meet at the notary's office to sign the deed. You transfer remaining funds, and the notary handles tax payments and registration.
- Registration: The notary registers your ownership with the Land Registry, making you the official owner.
Essential documents include your passport or ID, proof of funds or mortgage approval letter, the preliminary contract, proof of residence (for some transactions), bank statements showing deposit source, and any additional documents requested by the notary or bank. Non-EU buyers may need certified translations of documents.
Is a notary mandatory and what exactly do they do in Luxembourg property transactions?
Yes, using a notary is legally mandatory for all Luxembourg property transactions - there are no exceptions.
The notary serves as a state-appointed public official who ensures legal compliance and protects both buyer and seller interests. Their role goes far beyond simple document preparation. They conduct thorough title searches to verify ownership and check for any liens, mortgages, or legal issues affecting the property.
Notaries draft all contracts in compliance with Luxembourg law, calculate and collect all taxes and fees on behalf of the state, ensure proper fund transfers between parties, and officially register the new ownership with authorities. They also verify that building permits are in order and that the property complies with urban planning regulations.
While the notary represents both parties neutrally, you can additionally hire a lawyer for complex transactions or if you want independent legal advice. This is particularly recommended for commercial properties, properties with complicated ownership structures, or if you're unfamiliar with Luxembourg law. The notary's fees are regulated by law at approximately 1% of the purchase price.
It's something we develop in our Luxembourg property pack.
Which Luxembourg neighborhoods are best for foreigners to live in or invest in?
Luxembourg City's most sought-after neighborhoods for international residents offer distinct advantages based on your priorities.
Belair stands as the prestige address, commanding the highest prices at €14,308/m² as of June 2025. This upscale neighborhood attracts diplomats and executives with its tree-lined streets, proximity to international schools, and elegant architecture. Kirchberg, the modern financial district housing EU institutions, offers excellent investment potential with strong rental demand from international professionals.
Limpertsberg provides a perfect balance of urban convenience and residential calm, popular with expat families for its excellent schools and leafy environment. Gasperich (Cloche d'Or) represents Luxembourg's future - a rapidly developing area with modern infrastructure and new housing developments offering strong capital growth potential.
For better value, consider Bonnevoie, Gare, or Hollerich. These diverse, up-and-coming neighborhoods offer more affordable entry points while benefiting from urban regeneration programs. Young professionals and savvy investors increasingly target these areas for their growth potential.
Outside the capital, Esch-sur-Alzette provides significantly lower prices while maintaining good rental demand due to the university presence. The northern regions offer the most affordable options, with average prices around €5,812/m² - ideal for those seeking space and tranquility over urban convenience.
Where should I invest for the best rental yields and capital growth in Luxembourg?
Luxembourg City districts, particularly Kirchberg and Gasperich, offer the strongest combination of rental yields and capital appreciation potential.
As of Q2 2025, gross rental yields average 3.1% nationally, with Luxembourg City center achieving up to 3.5% for well-located two-bedroom apartments. Net yields typically run 1.5-2% lower after accounting for maintenance, management, and taxes. While these yields appear modest, Luxembourg's stability and consistent capital growth make it attractive for long-term investors.
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.
Kirchberg and Ville Haute benefit from business traveler and tourist demand, supporting premium short-term rental rates. The steady influx of EU workers and international company employees ensures consistent tenant demand. Gasperich's ongoing development and new infrastructure projects position it for significant capital appreciation over the next 5-10 years.
For pure rental yield optimization, consider properties near the University of Luxembourg in Belval or areas popular with cross-border workers. These locations offer steady tenant demand with potentially higher yields due to lower purchase prices. However, always factor in the total return including capital growth, not just rental income.
What are current property prices across Luxembourg's different regions?
Property prices in Luxembourg vary dramatically between the capital and outer regions, with a 250% difference between the most and least expensive areas.
Luxembourg City commands premium prices averaging €11,815/m² as of June 2025, with Belair topping the charts at €14,308/m². The city's limited space and high demand from international workers keep prices consistently elevated. Even "affordable" city districts like Beggen still average €9,018/m².
| Location | Sale Price (€/m²) | Monthly Rent (€/m²) |
|---|---|---|
| Belair | 14,308 | 33.84 |
| Gasperich-Cloche d'Or | 12,455 | 39.29 |
| Limpertsberg | 12,148 | 35.33 |
| Kirchberg | 12,124 | 35.48 |
| Ville Haute | ~12,000 | 35-50 |
| Gare | 10,886 | 34.62 |
| Bonnevoie | 10,270 | 35.60 |
| Luxembourg City Average | 11,815 | 34.45 |
| Center Region Average | 10,500 | 32.59 |
| North Region Average | 5,812 | 19.04 |
| National Average | 8,201 | 29.34 |
The stark price differences create opportunities for different investment strategies. Capital-focused investors target prime city locations despite lower yields, while income-focused buyers find better returns in secondary cities and border regions where prices are 50-60% lower than the capital.
What mistakes do foreigners commonly make when buying Luxembourg property?
The most costly mistake is underestimating total purchase costs by focusing only on the property price.
Many foreign buyers budget for the property price alone, then face shock when taxes, notary fees, and hidden costs add 8-10% to their investment. Even with first-time buyer credits, various fees quickly accumulate. Currency exchange costs particularly impact non-euro buyers, potentially adding thousands to the final bill.
Skipping proper due diligence ranks as the second major pitfall. Luxembourg's property market moves quickly, pressuring buyers to act fast. However, bypassing technical inspections or rushing legal checks exposes you to expensive problems like structural defects, title issues, or non-compliant renovations.
Overleveraging with excessive mortgages creates long-term financial strain, especially given current interest rates around 3.5-4.1%. Banks may approve higher amounts than prudent, so calculate your comfortable payment level including all ownership costs.
Perhaps the most fundamental misunderstanding involves residency rights. Buying property grants zero immigration benefits - you cannot live in Luxembourg just because you own property there. Many non-EU buyers discover this after purchase, complicating their investment plans.
Finally, attempting to bypass the mandatory notary system or choosing the cheapest service provider often backfires. The notary protects your interests and ensures legal compliance - this isn't an area to cut corners.
What are the tax implications of owning Luxembourg property as a foreigner?
Luxembourg's property tax regime remains surprisingly favorable for foreign owners, with minimal annual taxes but important considerations for rental income and capital gains.
Annual property taxes rank among Europe's lowest, typically under €100 per year for residential properties, though rates vary by commune. This minimal ongoing tax burden makes Luxembourg attractive for long-term property holders compared to neighboring countries with substantial annual property taxes.
Rental income receives less favorable treatment - it's taxed as personal income at progressive rates. However, you can deduct mortgage interest, maintenance costs, and depreciation. Non-resident landlords face withholding tax on rental income, though tax treaties with many countries prevent double taxation. Professional tax advice becomes essential for optimizing your rental income structure.
Capital gains tax depends heavily on your ownership period and usage. Your main residence enjoys complete exemption if you've lived there throughout ownership or for at least 5 years. Investment properties held over 2 years face tax at half the global rate (up to 21%), while properties sold within 2 years trigger higher "speculation income" rates.
Inheritance tax applies to Luxembourg property regardless of owner residence, with rates varying based on relationship to beneficiaries. Cross-border estate planning requires specialist advice to navigate both Luxembourg and home country tax obligations. Many investors establish holding structures to optimize their tax position.
It's something we develop in our Luxembourg property pack.
Can I complete the purchase remotely or must I be physically present in Luxembourg?
You can complete the entire property purchase remotely through power of attorney without visiting Luxembourg.
Many international buyers, particularly those from Asia and the Americas, successfully purchase Luxembourg property without ever setting foot in the country. The process involves appointing a local representative - typically your notary or a trusted lawyer - to act on your behalf through a formal power of attorney document.
The power of attorney must be properly drafted according to Luxembourg legal requirements, clearly specifying the representative's authority to sign contracts, transfer funds, and complete the purchase. Depending on your country of residence, the document may require notarization, apostille certification, and official translation into French, German, or Luxembourgish.
Your appointed representative can handle property viewings (often supplemented by video tours), negotiate with sellers, sign the preliminary contract, coordinate with banks for mortgage arrangements if needed, attend the final signing at the notary's office, and manage property handover and key collection.
While remote purchase is entirely feasible, visiting at least once provides valuable insights into neighborhoods, commute times, and local amenities that online research can't fully capture. However, for pure investment purchases or buyers familiar with Luxembourg, remote transactions work smoothly with proper legal representation.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Luxembourg's property market offers exceptional opportunities for foreign buyers in 2025, with no ownership restrictions and a stable investment environment.
Success requires understanding the total costs involved, choosing the right location for your goals, and working with qualified professionals throughout the process. Whether you're seeking a European base, rental income, or long-term capital growth, Luxembourg's transparent legal system and strong economy provide a solid foundation for property investment.
Sources
- Lawyers Luxembourg - Property Purchase Guide
- Lux Today - Foreign Property Buyers Guide
- Expatica - Luxembourg Mortgages
- AtHome - Notary Fees Luxembourg
- Global Property Guide - Luxembourg Rental Yields
- Immotop - Luxembourg Property Prices
- Guichet.lu - Property Tax Information
- CMS Law - Luxembourg Real Estate Guide
- Loyens & Loeff - Luxembourg Tax Guide
- NextImmo - Luxembourg Investment Areas