Why Luxembourg?

• Politically and economically stable EU hub

• Headquarters of major institutions and multinational firms

• Strong rental market supported by international workforce

• Limited housing supply keeps property values resilient

• Attractive for long-term capital preservation and secure income

Can Foreigners Buy Property in Luxembourg?

Yes — foreigners are free to buy, sell, and rent property in Luxembourg without restrictions.

• Full ownership rights for both individuals and foreign companies

• Transparent legal and financial system

• Popular with investors from France, Germany, Belgium, and the Gulf

Residency & Permit Programs 2025

• Luxembourg does not offer residency or citizenship through real estate investment

• Standard long-stay permits are based on employment, self-employment, or family reunification

• Owning property may support a visa application, but it is not a qualifying factor on its own

Legal Process of Buying Property

1. Engage a local notary or lawyer for due diligence

2. Sign a preliminary sale agreement (Compromis de Vente) and pay a deposit (~10%)

3. Legal checks and title verification are completed

4. Final deed is signed and registered with the Land Registry

5. Taxes and transaction fees are paid via the notary

Taxes & Fees

• Transfer tax: 6% + 1% transcription fee (total 7%)

• Notary/legal fees: ~2.5% combined

• Agent fees: Typically covered by the seller

• Annual property tax: 0.7–1% depending on location and property value

• Capital gains tax:

  • Individuals: taxed if sold within 2 years, exemptions apply after 2 years or on primary residences

  • Companies: taxed under corporate rules

• Rental income tax:

  • Individuals: taxed under progressive income tax rates

  • Companies: subject to business tax (~24%)

Mortgage Availability for Foreigners

• Local banks may offer loans to non-residents if income or assets are declared

• Loan-to-value (LTV): 60–80% depending on borrower profile

• Interest rates: ~2–3% depending on the property and client profile

• Approval is easier for EU residents and those with ties to Luxembourg

Is Luxembourg Right for You?

✅ Best for:

• Investors seeking capital security and strong legal protections

• Professionals relocating to work in the finance, legal, or EU sectors

• Long-term rental income seekers in core European cities

❌ Less ideal for:

• Investors seeking high yields or quick resale profits

• Buyers expecting immigration benefits through ownership

• Budget-sensitive investors due to high transaction costs

Top Places to Buy in Luxembourg (2025)

Luxembourg City (Centre, Kirchberg, Gasperich)

• Prime areas with strong long-term rental demand

• Home to EU offices, financial centers, and embassies

Suburban Municipalities (Strassen, Bertrange, Howald)

• Family-friendly, well-connected to the capital

• High-quality residential developments with good value retention

Northern & Countryside Regions (Ettelbruck, Diekirch)

• More affordable entry points

• Attractive for locals and lifestyle buyers, less demand for expats

Rental Yield & ROI Overview

• Yields are modest but steady

• Vacancy rates are among the lowest in Europe

• Rising rental prices are helping improve ROI in select districts

Trends in 2025

• Residential market showing moderate growth, especially in resale homes

• Rising demand for energy-efficient and green-certified apartments

• Strong international tenant base driving city-center rental pressure

• Suburban areas growing in popularity due to family demand and transit access

Common Mistakes to Avoid

• Underestimating transaction costs (can reach 10%+)

• Ignoring net yield vs. gross yield when evaluating rentals

• Failing to register the deed or handle taxes properly

• Buying in oversaturated zones with limited tenant demand

• Assuming a property purchase provides any residency advantage

Conclusion

Luxembourg is a premium, low-risk real estate market best suited for long-term investors who prioritize capital protection, tenant stability, and legal security. While yields are modest, the country’s tax stability, international workforce, and urban demand make it a stronghold for conservative real estate portfolios.

Work with local experts, plan for taxes upfront, and focus on quality locations—and Luxembourg can offer one of the safest places in Europe to hold property in 2025.