Investing in Real Estate Abroad: Luxembourg Expat Guide

Published on September 29, 2025 and written by Cyril Jarnias

Real estate investment in Luxembourg represents an attractive opportunity for expatriates looking to diversify their assets and benefit from a dynamic market at the heart of Europe. This comprehensive guide will walk you through the essential steps and considerations for successfully completing your real estate project in the Grand Duchy.

The Luxembourg real estate market: fertile ground for investors

Luxembourg stands out for its robust economy and political stability, making its real estate market one of the most attractive in Europe. Several factors contribute to this appeal:

• Sustained economic growth, with GDP growth forecasts between 3% and 4% for the coming years
• A constantly growing population, estimated to reach 1 million inhabitants by 2050
• Housing demand exceeding supply, creating positive pressure on prices
• A market resilient to economic crises

These elements make Luxembourg a wise choice for expatriates seeking to invest in a stable and promising real estate market. Property prices have shown steady growth in recent years, offering interesting prospects for long-term capital gains.

Legal and regulatory aspects of real estate investment in Luxembourg

Unlike some countries, Luxembourg offers a regulatory framework favorable to foreign investors. Here are the main points to remember:

• No major restrictions on property purchases by non-residents
• Transparent and secure purchasing process, overseen by notaries
• Possibility for non-residents to obtain mortgages from Luxembourg banks
• Stable and predictable tax framework

However, it is crucial to understand the specifics of the local market and to surround yourself with competent professionals to navigate this environment effectively.

Administrative procedures for property purchase in Luxembourg

The property purchase process in Luxembourg typically unfolds in several stages:

1. Property search: Use local real estate agents or specialized online platforms.

2. Purchase offer: Once you find a property, submit a written offer to the seller.

3. Sales agreement: If the offer is accepted, a sales agreement is signed, binding both parties.

4. Financing: Obtain a mortgage if necessary (see next section).

5. Notarial deed: The sale is finalized before a Luxembourg notary.

6. Registration: The deed is registered with the competent authorities.

Real estate financing for expatriates in Luxembourg

Luxembourg banks offer financing solutions tailored to expatriates and non-residents. Here are the key points to know:

• Possibility to obtain a mortgage up to 80% of the property value for non-residents (compared to 100% sometimes for residents)
• Generally competitive interest rates, although slightly higher than those offered to residents
• Loan terms can extend up to 25-30 years
• Higher personal contribution requirement for non-residents (typically 20% minimum)

To optimize your chances of obtaining favorable financing:

– Prepare a strong application demonstrating your financial capacity – Compare offers from multiple banks – Consider opening a bank account in Luxembourg to facilitate transactions

Real estate taxation for expatriates in Luxembourg

Real estate taxation in Luxembourg is relatively advantageous, but it’s essential to understand its implications. Here are the main elements to know:

Registration and transcription duties: – 6% for registration duties – 1% for transcription duties

“Bëllegen Akt” tax credit: Buyers can benefit from a tax credit on registration and transcription duties, under certain conditions.

Property tax: Relatively low in Luxembourg, it varies by municipality and property characteristics.

Tax on rental income: Rental income is taxed at the progressive rate of Luxembourg income tax.

Real estate capital gains: Full exemption after 2 years of ownership for a primary residence. For other properties, the tax rate gradually decreases with the holding period.

Real estate investment strategies for expatriates in Luxembourg

Luxembourg offers various real estate investment opportunities suited to expatriate profiles. Here are some strategies to consider:

1. Purchase of a primary residence: – Ideal for expatriates planning to settle long-term in Luxembourg – Allows benefiting from tax advantages (tax credit, capital gains exemption)

2. Rental investment: – Take advantage of strong rental demand, particularly in Luxembourg City – Generate additional income while benefiting from potential long-term capital gains

3. Purchase for medium-term resale: – Leverage the continuous growth of the Luxembourg real estate market – Strategy suitable for expatriates with medium-term visibility on their stay

4. Commercial real estate investment: – Diversify your portfolio by investing in offices or commercial premises – Benefit from Luxembourg’s economic dynamism

5. Investment in Luxembourg REITs: – Solution for investing in Luxembourg real estate with a lower entry ticket – Allows delegated management and risk diversification

Practical tips for successful real estate investment in Luxembourg

To maximize your chances of success in your Luxembourg real estate project, follow these recommendations:

• Conduct thorough market research to identify high-potential areas
• Engage local professionals (real estate agents, notaries, lawyers) to guide you through the process
• Anticipate additional costs (notary fees, taxes, potential renovations) in your overall budget
• Stay informed about regulatory and tax developments that could impact your investment
• Consider creating a legal structure (real estate company) to optimize the management and transfer of your real estate assets

Conclusion: Luxembourg, a prime destination for expatriate real estate investment

Investing in Luxembourg real estate represents an attractive opportunity for expatriates seeking to diversify their assets in a stable and promising market. With a strong economy, a regulatory framework favorable to foreign investors, and encouraging growth prospects, the Grand Duchy offers fertile ground for profitable real estate projects.

However, as with any foreign investment, it’s crucial to prepare well, inform yourself about local specifics, and surround yourself with competent professionals to navigate this environment effectively. By following the advice and strategies presented in this guide, you’ll be able to realize your Luxembourg real estate investment project with confidence and insight.