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 has some of the highest property prices in Europe, but that does not mean rental yields are impossible to find.
In this blog post, we break down the actual rental yield numbers you can expect across different neighborhoods, property types, and unit sizes in Luxembourg as of early 2026.
We constantly update this article to reflect the latest market conditions and official data.
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
- The average gross rental yield in Luxembourg sits around 3.7% in early 2026, which is lower than most European capitals because property prices have historically risen faster than rents.
- Studios and small one-bedroom apartments in Luxembourg deliver the best yields, often reaching 4.2% to 5.3% gross, because they attract the largest pool of renters (singles, couples, newcomers).
- Neighborhoods like Gare, Bonnevoie, and Hollerich in Luxembourg City tend to offer higher yields than prestigious areas like Belair or Limpertsberg, where prices are pushed up by prestige rather than rental income.
- Luxembourg's vacancy rate for well-priced rental properties is extremely low, typically around 1.5%, which means landlords rarely struggle to find tenants.
- The gap between gross and net yield in Luxembourg is roughly 1.1 percentage points, mainly due to condo charges, maintenance reserves, and insurance rather than property taxes.
- A "good" gross rental yield in Luxembourg is anything above 4.5%, but achieving that usually requires buying outside the most central locations or focusing on smaller units.
- Upcoming tram network expansions and the Kuebebierg district development in Kirchberg are expected to support rent growth in connected neighborhoods over the next few years.
- Houses in Luxembourg typically yield less (2.5% to 3.6% gross) than apartments because their purchase prices are much higher while rents do not scale proportionally.
What are the rental yields in Luxembourg as of 2026?
What's the average gross rental yield in Luxembourg as of 2026?
As of early 2026, the average gross rental yield for residential properties in Luxembourg is approximately 3.7%, which reflects how expensive property prices are relative to rents in this market.
Most typical residential properties in Luxembourg fall within a gross yield range of 3.0% to 4.8%, depending on location, property type, and unit size.
Compared to other European capitals, Luxembourg's gross yields are on the lower end because property prices have historically climbed faster than rental prices, compressing returns for buy-to-let investors.
The single most important factor influencing gross yields in Luxembourg right now is the high purchase price level, meaning that even when rents are strong, the math often results in modest percentage returns.
What's the average net rental yield in Luxembourg as of 2026?
As of early 2026, the average net rental yield in Luxembourg is around 2.6%, which is what landlords actually keep after paying typical running costs and accounting for vacancy.
The difference between gross and net yield in Luxembourg is typically around 1.0 to 1.4 percentage points, which accounts for insurance, maintenance, condo charges, and a vacancy buffer.
In Luxembourg specifically, the expense that most significantly reduces gross yield to net yield is not property tax (which is relatively low) but rather condominium charges and maintenance reserves, especially in apartment buildings with shared facilities.
Most standard investment properties in Luxembourg deliver net yields in the range of 1.8% to 3.6%, with the variation driven by location quality, building age, and how efficiently costs are managed.
By the way, you will find much more detailed rent ranges in our property pack covering the real estate market in Luxembourg.
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.
What yield is considered "good" in Luxembourg in 2026?
In Luxembourg, a gross rental yield of 4.5% or higher is generally considered "good" by local investors, as it meaningfully exceeds the national average of around 3.7%.
The threshold that typically separates average-performing properties from high-performing ones in Luxembourg is around 4.0% to 4.5% gross, and reaching those levels usually requires either buying in less premium locations or targeting smaller unit sizes with strong renter demand.
How much do yields vary by neighborhood in Luxembourg as of 2026?
As of early 2026, the spread in gross rental yields between the highest-yield and lowest-yield neighborhoods in Luxembourg is roughly 2.6 percentage points, ranging from about 2.6% in premium areas to around 5.2% in more affordable locations.
Neighborhoods that typically deliver the highest rental yields in Luxembourg are those with moderate purchase prices but strong renter demand, such as Gare, Bonnevoie, and Hollerich in Luxembourg City, as well as Esch-sur-Alzette (especially Belval), Differdange, and Dudelange.
On the other hand, neighborhoods that typically deliver the lowest rental yields are the prestigious residential areas where property prices are pushed up by scarcity and prestige, such as Belair, Limpertsberg, and Kirchberg in Luxembourg City.
The main reason yields vary so much across neighborhoods in Luxembourg is that property prices differ more dramatically than rents do, so areas with lower purchase costs relative to achievable rents naturally produce better percentage returns.
By the way, we've written a blog article detailing what are the current best areas to invest in property in Luxembourg.
How much do yields vary by property type in Luxembourg as of 2026?
As of early 2026, gross rental yields in Luxembourg range from about 2.5% for family houses to around 5.3% for studios, with apartments falling somewhere in between depending on their size.
The property type that currently delivers the highest average gross rental yield in Luxembourg is studios and small one-bedroom apartments, which typically achieve 4.2% to 5.3% gross because they command the best rent per square meter and attract a deep pool of renters.
Conversely, the property type that currently delivers the lowest average gross rental yield in Luxembourg is single-family houses, which typically achieve only 2.5% to 3.6% gross because their high purchase prices are not matched by proportionally higher rents.
The key reason yields differ between property types in Luxembourg is that larger properties cost much more to buy, but renters who can afford high rents often prefer to purchase rather than rent, which limits how much landlords can charge.
By the way, you might want to read the following:
What's the typical vacancy rate in Luxembourg as of 2026?
As of early 2026, the typical vacancy rate for well-priced residential rental properties in Luxembourg is around 1.5%, which reflects the country's structurally tight housing market.
Across different neighborhoods in Luxembourg, vacancy rates can range from as low as 0.7% in high-demand central areas to around 3.0% for properties that are overpriced, have poor energy ratings, or unusual layouts.
The main factor driving vacancy rates in Luxembourg is pricing accuracy: units priced correctly for their location and condition re-let almost immediately, while overpriced or poorly maintained properties can sit vacant for weeks.
Compared to national and regional averages in Europe, Luxembourg's vacancy rate is notably low, which is a direct result of strong renter inflows from international workers, EU institutions, and a persistent housing supply shortage.
Finally please note that you will have all the indicators you need in our property pack covering the real estate market in Luxembourg.
What's the rent-to-price ratio in Luxembourg as of 2026?
As of early 2026, the average monthly rent-to-price ratio in Luxembourg is approximately 0.31%, meaning that for every 100,000 euros of property value, you can expect roughly 310 euros per month in rent before charges.
A rent-to-price ratio of 0.35% or higher is generally considered favorable for buy-to-let investors in Luxembourg, and this ratio is essentially the same thing as the gross rental yield expressed on a monthly basis rather than annually.
Compared to other Western European capitals, Luxembourg's rent-to-price ratio is relatively low because property prices have grown faster than rents over the past decade, making it harder to achieve strong cash returns from rental income alone.
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.
Which neighborhoods and micro-areas in Luxembourg give the best yields as of 2026?
Where are the highest-yield areas in Luxembourg as of 2026?
As of early 2026, the top three highest-yield neighborhoods in Luxembourg are Gare and Bonnevoie in Luxembourg City, along with Belval in Esch-sur-Alzette, all of which benefit from strong renter demand without the premium price tags of more prestigious areas.
In these top-performing areas like Gare, Bonnevoie, and Belval, gross rental yields typically range from 4.2% to 5.2%, which is significantly above the national average of around 3.7%.
The main characteristic these high-yield areas share is that they offer good accessibility to jobs and transport while having purchase prices that remain more affordable than prime residential districts, creating a favorable rent-to-price ratio.
You'll find a much more detailed analysis of the areas with high profitability potential in our property pack covering the real estate market in Luxembourg.
Where are the lowest-yield areas in Luxembourg as of 2026?
As of early 2026, the top three lowest-yield neighborhoods in Luxembourg are Belair, Limpertsberg, and Kirchberg in Luxembourg City, where prestige and scarcity have pushed property prices well above what rental income can justify.
In these low-yield areas like Belair, Limpertsberg, and Kirchberg, gross rental yields typically range from only 2.6% to 3.3%, which is well below what most investors would consider acceptable for pure cash-flow purposes.
The main reason yields are compressed in these areas of Luxembourg is that buyers are willing to pay a premium for prestige, lifestyle, and long-term capital appreciation, which drives prices up faster than rents can follow.
Buying a property in a low-yield area is one of the mistakes we cover in our list of risks and pitfalls people face when buying property in Luxembourg.
Which areas have the lowest vacancy in Luxembourg as of 2026?
As of early 2026, the top three neighborhoods with the lowest residential vacancy rates in Luxembourg are Kirchberg (due to its massive employment base), Gare (due to its transport connectivity), and Gasperich (due to its proximity to office clusters).
In these low-vacancy areas like Kirchberg, Gare, and Gasperich, vacancy rates are estimated to be around 0.5% to 1.0%, meaning well-priced units almost never sit empty for more than a few days.
The main demand driver that keeps vacancy low in these areas of Luxembourg is the constant inflow of international workers and professionals who prioritize short commutes and public transport access over neighborhood prestige.
The trade-off investors typically face when targeting these low-vacancy areas is that purchase prices tend to be higher (especially in Kirchberg), which can compress yields even though occupancy is virtually guaranteed.
Which areas have the most renter demand in Luxembourg right now?
The top three neighborhoods currently experiencing the strongest renter demand in Luxembourg are Gare, Bonnevoie, and Kirchberg, all of which combine excellent transport links with proximity to major employers.
The type of renter profile driving most of the demand in these areas is young professionals, international workers, and employees of EU institutions who need convenient access to their workplaces without owning a car.
In these high-demand neighborhoods like Gare, Bonnevoie, and Kirchberg, rental listings for well-priced, modern apartments typically get filled within one to two weeks, and sometimes within just a few days.
If you want to optimize your cashflow, you can read our complete guide on how to buy and rent out in Luxembourg.
Which upcoming projects could boost rents and rental yields in Luxembourg as of 2026?
As of early 2026, the top three upcoming infrastructure and development projects expected to boost rents in Luxembourg are the tram network expansion toward the airport, the Kuebebierg district development in Kirchberg, and the continued Belval innovation campus buildout.
The neighborhoods most likely to benefit from these projects are Kirchberg and the Luxexpo corridor (from the tram expansion and Kuebebierg), as well as Belval in Esch-sur-Alzette (from the campus and smart city initiatives).
Once these projects are completed, investors might realistically expect rent increases of around 5% to 15% in the most directly affected micro-areas, though this will depend on how quickly new amenities and transport links become operational.
You'll find our latest property market analysis about Luxembourg here.
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What property type should I buy for renting in Luxembourg as of 2026?
Between studios and larger units in Luxembourg, which performs best in 2026?
As of early 2026, studios and small one-bedroom apartments perform better than larger units in Luxembourg in terms of both rental yield and occupancy, making them the preferred choice for yield-focused investors.
In Luxembourg, studios typically achieve gross rental yields of 4.2% to 5.3% (roughly 35,000 to 45,000 euros or 37,000 to 48,000 USD in annual rent on a typical purchase), while larger two or three-bedroom units usually deliver only 2.9% to 4.3% gross.
The main factor that explains why smaller units outperform in Luxembourg is that they attract the largest renter pool (singles, couples, and newcomers), and their rent per square meter is significantly higher than for larger apartments or houses.
However, one scenario where a larger unit might actually be the better investment choice in Luxembourg is when targeting expat families on corporate relocation packages, who often pay premium rents and sign longer leases for spacious three-bedroom apartments near international schools.
What property types are in most demand in Luxembourg as of 2026?
As of early 2026, the most in-demand property type in Luxembourg is modern, energy-efficient apartments with one to two bedrooms, located near public transport and services.
The top three property types ranked by current tenant demand in Luxembourg are: first, one-bedroom apartments; second, studios; and third, two-bedroom apartments, with all three benefiting from strong interest among young professionals and international workers.
The primary demographic trend driving this demand pattern in Luxembourg is the continued influx of highly mobile international workers and EU institution employees, who prioritize convenience, transit access, and low running costs over space.
One property type that is currently underperforming in demand and likely to remain so in Luxembourg is older, poorly insulated houses in peripheral locations without good public transport, as these are increasingly difficult to rent at competitive rates.
What unit size has the best yield per m² in Luxembourg as of 2026?
As of early 2026, the unit size range that delivers the best gross rental yield per square meter in Luxembourg is between 25 and 55 square meters, which covers studios and compact one-bedroom apartments.
For units in this optimal size range in Luxembourg, the typical gross rental yield is around 4.5% to 5.3%, which translates to roughly 25 to 35 euros per square meter per month (or approximately 27 to 37 USD per square meter).
The main reason smaller or larger units tend to have lower yield per square meter in Luxembourg is that as size increases, the price per square meter does not fall as fast as the rent per square meter, so investors end up paying proportionally more for space that generates proportionally less income.
By the way, we also have a blog article detailing whether owning an Airbnb rental is profitable 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 costs cut my net yield in Luxembourg as of 2026?
What are typical property taxes and recurring local fees in Luxembourg as of 2026?
As of early 2026, the annual property tax (impôt foncier) for a typical rental apartment in Luxembourg is usually just a few hundred euros per year, often between 150 and 500 euros (roughly 160 to 530 USD), making it relatively modest compared to other recurring costs.
Other recurring local fees landlords must budget for annually in Luxembourg include condominium or syndic charges (which can range from 1,000 to 3,000 euros or 1,060 to 3,180 USD per year for a typical apartment), building reserve fund contributions, and waste collection fees.
Together, property taxes and recurring fees in Luxembourg typically represent around 5% to 10% of gross rental income, though this varies depending on building type and the scope of shared services.
By the way, we cover all the hidden fees and taxes in our property pack covering the real estate market in Luxembourg.
What insurance, maintenance, and annual repair costs should landlords budget in Luxembourg right now?
The estimated annual landlord insurance cost for a typical rental property in Luxembourg is around 250 to 800 euros (roughly 265 to 850 USD), depending on coverage level and building characteristics.
The recommended annual maintenance and repair budget in Luxembourg is approximately 0.7% to 1.1% of property value, which for a 500,000 euro apartment would mean setting aside around 3,500 to 5,500 euros (3,700 to 5,800 USD) per year.
The type of repair expense that most commonly catches landlords off guard in Luxembourg is major co-ownership works such as facade renovations, elevator replacements, or roof repairs, which can result in special assessments of several thousand euros with little advance notice.
In total, landlords in Luxembourg should realistically budget around 4,000 to 6,500 euros (4,250 to 6,900 USD) per year for insurance, maintenance, and repairs combined on a typical rental apartment, though this can vary significantly depending on building age and condition.
Which utilities do landlords typically pay, and what do they cost in Luxembourg right now?
In Luxembourg, tenants typically pay for electricity, gas or heating (when individually metered), internet, and day-to-day consumption utilities, while landlords usually cover building insurance, syndic administration, and certain common-area costs that cannot be passed through.
For landlord-paid utilities and building charges that cannot be recovered from tenants, the estimated monthly cost in Luxembourg is typically around 50 to 150 euros (roughly 53 to 160 USD) for a standard rental apartment, though this depends heavily on the building's setup and what is included in the condo charges.
What does full-service property management cost, including leasing, in Luxembourg as of 2026?
As of early 2026, the monthly property management fee for full-service management in Luxembourg typically ranges from 6% to 10% of collected rent (plus VAT), which for a 2,000 euro monthly rent would mean roughly 120 to 200 euros (127 to 212 USD) per month.
On top of ongoing management, the typical leasing or tenant-placement fee in Luxembourg is around half a month's rent plus VAT for the landlord's share (following the 2024 reform that requires 50/50 fee splitting), so placing a tenant at 2,000 euros per month would cost the landlord approximately 1,000 to 1,200 euros (1,060 to 1,270 USD) including VAT.
What's a realistic vacancy buffer in Luxembourg as of 2026?
As of early 2026, landlords in Luxembourg should set aside around 4% to 8% of annual rental income as a vacancy buffer, which covers the realistic possibility of a few weeks between tenants even in this tight market.
In practical terms, landlords in Luxembourg typically experience around 2 to 4 vacant weeks per year on well-priced properties, though this can stretch to 6 weeks or more for units that are overpriced, poorly located, or have low energy ratings.
Buying real estate in Luxembourg can be risky
An increasing number of foreign investors are showing interest. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.
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 |
|---|---|---|
| STATEC | STATEC is Luxembourg's official national statistics office, making it the closest thing to ground truth for economic and housing data. | We used STATEC as the baseline for macro context and official housing statistics. We cross-checked private-sector indicators against STATEC data where possible. |
| Observatoire de l'Habitat | This is the government-backed housing observatory run by the Ministry of Housing and LISER that publishes regular housing market analysis. | We used it for Luxembourg-specific sale-price and advertised rent trends. We also used it to anchor yield logic to Luxembourg's actual market structure. |
| Observatoire publications index | This is the official directory of the Observatory's methodological reports and quarterly market notes. | We used it to identify the newest official analyses available before January 2026. We triangulated those with statistics and market datasets. |
| Q1 2025 Market Report (Observatoire) | This is an official quarterly market snapshot produced for the Ministry's Observatory. | We used it to ground our rent and price direction analysis. We translated those levels into yield ranges for early 2026. |
| Banque centrale du Luxembourg | This is Luxembourg's central bank and the official source for local lending rate statistics. | We used BCL rates to set the financing reality check for yield comparisons. We used them to explain why "good yield" thresholds shift when rates change. |
| Ministry of Housing lease rules | This is the government's official summary of lease law changes and key limits for landlords and tenants. | We used it to explain the legal rent ceiling and agency fee sharing rules. We reflected those rules in our net-yield cost assumptions. |
| Guichet.lu property tax explainer | Guichet.lu is the official government services portal that explains taxes in practical terms for citizens. | We used it to define what property tax is and how it applies. We estimated typical annual amounts using Luxembourg's low recurring property tax reality. |
| STATEC inflation forecast | This is an official STATEC note describing inflation expectations and indexation context. | We used it to explain why operating costs and indexed rents can drift upward over time. We used it only as macro context, not as a direct rent level. |
| Eurostat Housing in Europe 2025 | Eurostat is the EU's official statistical authority, useful for cross-country context and benchmarks. | We used it to sanity-check Luxembourg's structurally expensive housing profile versus peers. We kept our assumptions consistent with EU-level patterns. |
| FRED/BIS Residential Price Index (Luxembourg) | This is a transparent time-series view of Luxembourg residential price indices sourced from major statistical providers. | We used it to confirm that Luxembourg's price level is high and that cycle timing matters. We did not use it to compute local prices directly, only to cross-check direction. |
| FRED HICP Rentals (Luxembourg) | This is a transparent time-series view of official rent inflation measures from Eurostat's HICP component. | We used it to validate that rents move more smoothly than prices. We used that to justify why yields can change significantly when prices swing. |
| Ministry of Mobility tram expansion | This is an official government announcement about a key transport project shaping micro-markets in Luxembourg. | We used it to identify rent-supportive accessibility upgrades around tram corridors. We mapped that to neighborhoods where renter demand typically strengthens. |
| Fonds Kirchberg (Kuebebierg district) | This is the official public developer for Kirchberg's major land reserve projects and future districts. | We used it to identify where substantial new supply and amenities are planned. We explained where rents could be supported and yields may compress if prices rise. |
| LIST SmartSpires Belval | LIST is a major Luxembourg research institute linked to EU innovation initiatives, giving credibility to Belval development projections. | We used it to identify rent-supportive smart city and innovation ecosystem developments. We explained how these can make areas more attractive to professional renters. |
| STATEC construction prices | This is official STATEC data on construction cost trends, useful for estimating maintenance and repair cost drift. | We used it to inform our maintenance cost assumptions. We kept repair budget estimates consistent with Luxembourg's construction cost environment. |
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