An international financial center with a huge appeal, Luxembourg and its 660,000 inhabitants is home to nearly 170 different nationalities. A melting pot that grows at the rate of 15,000 new residents each year.
The high level of earnings of these new residents tends to push real estate prices up in the Grand Duchy. "We are building 4000 new homes a year, where we actually need 6000" to support the increase in the number of residents, says the Luxembourg daily newspaper L'Essentiel.
A view shared by Jean-Francois Zimmer, a real estate agent in Luxembourg: "It has created considerable real estate pressure that has caused prices to double in the span of a few years".
Despite rising mortgage rates and a slight fall in market prices in 2023, the property market in Luxembourg remains tight.
The Observatoire estimates that in the Canton of Luxembourg, the average purchase price of a house is around 1,594,711 euros. That’s twice as much as in the north of the country.
For a new apartment, you can expect to spend 10,402 euros per square meter in the Canton of Luxembourg.
To keep on top of the evolution of real estate market prices, the Observatoire de l'Habitat website is a most valuable partner. Finally, remember that the final sale price of the property will also include the real estate agency commission and notary fees.
As close observers of this surge in property prices, some Luxembourg dailies evoke the risk of a "real estate bubble". For the real estate agent, Luxembourg has not yet reached this point. "We have not reached the same real estate price points as London or New York. Moreover, in Luxembourg there are many wealthy people who can afford to buy at these prices.”
When buying your house or flat, you can benefit from a tax abatement, also known as tax credit, of up to 20,000 euros.
But the incentives that encourage ownership do not stop there. In Luxembourg, transaction costs are limited, the property tax is extremely low, the capital gain is not taxable on resale and interest on mortgages is tax deductible. Add the tax credit on notarial deeds or mortgage insurance. Strong arguments that end up convincing buyers even in a rising real estate market.
According to the real estate agent, "in principle everyone can access the purchase of property" provided they can demonstrate the origin of funds to avoid money laundering problems. They also note that, "a personal contribution of about 20% of the purchase price is often requested”. You will also have to take out an insurance policy for your property, "otherwise the bank may not give their green light".
For the property search, the following agency websites Wortimmo.lu, Athome.lu or Immotop.lu are favored by sellers. In fact, according to the official portal of the Grand Duchy of Luxembourg, few owners manage the sales process of their property themselves. The overwhelming majority of them use an agency to manage visits and administrative procedures.
But you don't have to settle for the "classic" real estate websites only, you can also resort to a completely new hybrid concept of an off-market agency such as Secretimmo. There you will find exceptional properties that are not listed on classic websites. Maybe you will hit the jackpot and find what you are looking for without competing with too many real estate seekers. In the same line, the Nextimmo platform, which lists properties, often exclusively, from over 100 partner agencies in Luxembourg.
Once the property of your dreams is found, you will have to appoint a notary to perform the deed of sale after the signing of the agreement. To find the one that will protect your interests, visit the notaries’ website in Luxembourg.
Finally, if you have recently arrived in the Grand Duchy, do not forget that you must first declare yourself a Luxembourg resident before you can buy a property.