Housing and rent

Buying real estate in Luxembourg as a foreigner: pros and cons

Do you live outside Luxembourg and would like to know if it is possible to buy a property in the Grand Duchy as a foreigner and what the requirements are? You have come to the right place. In this article, we will answer this question and also examine the Luxembourg real estate market, the advantages and disadvantages of buying in Luxembourg, and the buying process.

Table of content

If you are thinking of buying in Luxembourg, it is worth bearing in mind that the real estate market there is one of the most expensive in Europe.

Can foreigners buy property in Luxembourg?

Let's start by answering the question that surely brought you here: Can foreigners buy real estate in Luxembourg? Well, in Luxembourg, there are no differences in the rights of access to property based on nationality, nor are there any special laws for foreigners wishing to acquire property in the country. This means that the rights of foreigners are essentially the same as those of Luxembourg citizens, and therefore, both European and non-European foreigners are entitled to acquire real estate or land in Luxembourg under the same conditions as locals.

This implies that foreigners do not need any governmental authorization or any specific requirement to be able to purchase a property in the country. Moreover, there is also no minimum investment amount.

It is not even necessary to be a resident of Luxembourg to buy a property in the country. However, it is important to understand that buying a property in Luxembourg does not give the buyer the right to reside in the country. Buyers who purchase a property in Luxembourg and wish to live in the country must follow the usual visa and residency application procedures applicable to their situation.

Overview of the Luxembourg real estate market

Now that we know that foreigners can buy property in the country under the same conditions as locals, let's have a look at the country's real estate market. We will start by reviewing Luxembourg property prices, and then we will discuss the advantages and disadvantages of buying in the country for a foreigner.

Luxembourg real estate market prices

Luxembourg has seen a growing demand for property in recent decades, which has coupled with a limited supply, leading to a significant increase in real estate prices, especially in Luxembourg City and nearby urban areas.

Prices have risen so much that the Luxembourg real estate market is one of the most expensive in Europe. However, in recent years there has been a stabilization and even a slight decrease in prices.

According to the Observatoire de l'Habitat's 12th Analysis Report, prices of existing apartments had in the 3rd quarter of 2024 a slight drop of 3.6% compared to the same quarter of the previous year, while prices of existing houses remained stable. On the other hand, apartments under construction (VEFA) have shown a more pronounced reduction, with a year-on-year drop of 2.6%, although transactions in this segment remain limited.

Source: Immotop

According to Immotop, in February 2025 the average price of residential properties for sale stood at 8,179 euros/m2, representing a decrease of 5.21% compared to February 2024. Over the past two years, the average price in Luxembourg peaked in April 2023 at 9,028 euros/m2.

The two tables below provide an overview of the current situation in the residential market at both the country and capital city level.

Luxembourg City

Zone	Price (€/m2)
Belair	14 093
Gasperich-Cloche d’or	12 500
Limpertsberg	12 270
Kirchberg	12 247
Muhlenbach	11 896
Cents	11 568
Ville Haute	11 563
Neudorf-Weimershof	11 553
Merl	11 464
Hollerich	11 462
Rollingergrund	11 082
Clausen	11 075
Cessange	10 980
Gare	10 890
Weimerskirch	10 410
Pulvermuhl	10 375
Bonnevoie-Verlorenkost	10 363
Eich	10 344
Pfaffenthal	10 285
Hamm	9 759
Dommeldange	9 589
Beggen	9 285
Grund	4 678

Luxembourg

Regions	Price (€/m2)
Center	10 493
West	7 541
East	6 947
South	6 849
North	5 814

Advantages and disadvantages of buying in Luxembourg

The Luxembourg real estate market presents both advantages and disadvantages for a foreign investor. Let's have a look at some main ones:

Pros and cons

Economic and political stability: Luxembourg is one of the most economically stable countries in Europe, with a strong economy based on financial services, technology, and logistics. This provides security and significantly reduces the risk of real estate prices going down for political or economic reasons.

Attractive real estate market: Although prices are considerably high, the growing demand for housing makes property in Luxembourg a sound investment, especially in and around the capital.

Stable yields: Rents in Luxembourg are quite high, which ensures that even though purchase prices are considerably high, investors who choose to rent properties will be able to guarantee a return.

Legal protection: The country has a clear and transparent legal framework for the purchase and ownership of real estate, which reduces the risk of legal disputes.

Tax advantages: Luxembourg offers tax advantages to foreign investors such as deductibility of mortgage interest, low real estate tax and reduction on capital gains taxation after prolonged detention. In addition, the country has multiple bilateral agreements that avoid double taxation.

High real estate prices: Real estate prices in Luxembourg are among the highest in Europe, which implies a significant initial capital outlay.

Shortage of properties: The Luxembourg real estate market is very competitive, marked by high demand and limited supply, especially in urban areas. This makes it difficult to find property.

Risks associated with remote management: Managing a property remotely may entail additional costs. The fact that the detention of a property does not guarantee a residence permit may entail additional costs and procedures for non-European foreigners wishing to visit the country, even temporarily, to ensure the management of the property.

Slowing market trend: In recent years, there has been a slight reduction in prices, which could generate uncertainty about the growth of property values in the short term.

Strict regulations for new developments: Luxembourg has strict regulations for housing construction and development, so it can be difficult to find suitable land and careful analysis is needed before buying.

Low yields compared to other markets: Although rents are high, yields as a percentage of property value may be lower compared to other markets, such as Portugal or Spain, where purchase prices are more affordable.

Steps to buying real estate in Luxembourg

Finally, we present a summary of the process of buying a real estate property in Luxembourg, highlighting some particularities for foreign investors:

Definition of needs

The first step in the acquisition of a property in Luxembourg consists of clearly defining your objectives and needs. Foreign investors should determine factors such as budget, type of property (apartment, house or land) and the purpose of the investment (residential, rental or resale).

Property search

Property search is one of the most important and difficult processes as the real estate market in Luxembourg is quite competitive and has a limited supply. At this point, it is possible to use platforms such as Immotop.lu, AtHome.lu and Luxembourg Sotheby's International Realty. It is also useful to contact local real estate agencies.

Selection, analysis, and due diligence

Once several interesting options have been identified, it is recommended to narrow down the search to a short list of properties that meet the defined criteria. Subsequently, it is essential to perform a detailed analysis (due diligence) of the selected properties. This analysis should include a physical inspection of the property, a review of the legal documents, an analysis of the price of the property compared to market prices, an analysis of the potential return on investment and a review of local regulations, among other aspects.

Submitting a purchase offer and negotiation

Once a property has been selected, a formal offer must be submitted, including the proposed price and any specific conditions. The seller may accept the proposed price, or a negotiation process may take place. Foreign buyers should have legal advice to ensure that the offer complies with local regulations and to support them during the negotiation process.

Signing of the sale commitment (compromis de vente)

The first formal stage of the purchase process is the signing of a document called compromis de vente that details the agreed terms, such as the final price, payment terms and the deadline for completing the transaction. This document has an important legal value in Luxembourg; once signed by both parties, it is legally binding for both the buyer and the seller. It is, therefore, important for foreign buyers to ensure that a local lawyer or advisor reviews the document before signing it.

Right of withdrawal

In Luxembourg, buyers have a period of 10 days after signing the commitment of sale to withdraw without penalty. This right provides an opportunity for the buyer to reconsider the transaction or resolve any financial or legal issues.

Obtaining financing

If financing is required, the next step is to apply for a mortgage loan. A foreign buyer may choose to do this in his country of residence or Luxembourg, but in the latter case, the process may be more difficult and rigorous than for a local buyer. The banks will certainly ask for additional guarantees and proof of financial solvency in the country of origin.

Formalization of the purchase by notarial act

The transaction is completed by signing the authentic act in front of a notary. This document formalizes the transfer of ownership and ensures that all legal requirements have been met, such as verification of the seller's ownership and compliance with tax obligations. In Luxembourg, the notary acts as a neutral intermediary and is mandatory in any real estate transaction.

Payment and registration

The last step is to make the final payment, which includes the price of the property, the registration, and deed taxes, which vary according to the type and location of the property and the notary fees. Subsequently, the notary is in charge of registering the property in the public registry so that the buyer obtains the official title.

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As we have seen, foreigners can buy real estate in Luxembourg under the same conditions as locals. However, foreign buyers will have to face certain difficulties such as high prices, shortage of property and the challenges of remote management. In addition, they will have to deal with local laws and regulations that will probably be unfamiliar to them. It is therefore highly recommended that any buyer potentially interested in acquiring real estate in the country seek appropriate advice from local professionals who know the industry and can guide them through the entire process.