Rent or buy: what buying really costs in Luxembourg
On a €567,450 flat, purchase duties come to €39,722 on paper, and a buyer who lives in it pays €100. In Luxembourg, buying a home or a building plot carries 7% in duties, 6% registration and 1% transcription, according to Guichet.lu's page on the "Bëllegen Akt" tax credit.
That tax credit comes off the duties when the home is for personal occupation. It is set at €40,000 per person by the law of 3 July 2025, according to the AED's indirect tax portal, updated on 21 October 2025. The housing ministry announced on 17 July 2026 a rise to €45,000 per person, applicable from 16 July 2026; the Chamber of Deputies states that the measure will apply retroactively once the law is passed. In September 2026, the AED portal still shows €40,000. A minimum of €100 is collected in every case. The buyer must move in within two years of the deed, four for a plot or a home under construction, then live there for two years without a break.
| Home price | Duties at 7% | Paid by a single buyer | Paid by a couple |
|---|---|---|---|
| €400,000 | €28,000 | €100 | €100 |
| €567,450 | €39,722 | €100 | €100 |
| €800,000 | €56,000 | €16,000 | €100 |
| €1,200,000 | €84,000 | €44,000 | €4,000 |
Up to a price of €571,428 for a single buyer, the duties are almost entirely covered.
Notary fees follow a regulated tariff whose rate falls by price band (Grand-Ducal regulation of 24 July 1971 revising the notaries' tariff). Its current scale could not be checked: the example sets aside an allowance of €10,000 for notary fees and mortgage registration, an assumption and not a quote. That registration carries a 0.05% duty according to the indirect tax portal's mortgage page.
For interest, the Banque centrale du Luxembourg release of 7 July 2026 gives the May 2026 rates on new housing loans to households: 3.10% variable, 3.74% fixed for one to five years, 3.93% for five to ten years and from 3.58% to 3.99% beyond.
In a mortgage payment only the interest is a cost; the capital simply moves from one pocket to another.
Rent or buy in Luxembourg: the 20-year example
Take an existing 75 m² flat. According to Le Logement en chiffres no. 19 from the Observatoire de l'Habitat and STATEC, existing flats of 70 to 89 m² sold for an average of €7,566 per m² in 2025, which gives €567,450 for 75 m².
Against it, a rent of €1,800 a month, close to the national average of €1,796 in the Observatoire's file of advertised rents for flats advertised from April 2025 to March 2026. That rent is a 3.8% gross rental yield, close to the 3.74% estimated for 2023 in the Observatoire's report on rental yields.
The rest is assumptions:
- A 20% deposit (€113,490) and a €453,960 loan over 25 years at 3.6%, inside the range of the BCL for May 2026, giving a monthly payment of €2,297.
- Purchase costs of €10,100: €100 of duties and €10,000 for the notary and the mortgage.
- Upkeep, works and non-recoverable charges at 1% of the price a year, or €5,674.50.
- Prices rising 2% a year, resale costs of 3%, rent rising 2% a year.
- The deposit and costs (€123,590) invested by the renter at 4% a year, an assumed return and not a promise.
| Horizon | Interest paid | Upkeep and charges | Price gain net of resale costs | Net cost of buying | Rent paid | Gain on invested deposit | Net cost of renting |
|---|---|---|---|---|---|---|---|
| 1 year | €16,156 | €5,675 | −€6,015 | €37,946 | €21,600 | €4,944 | €16,656 |
| 3 years | €47,199 | €17,024 | €16,667 | €57,656 | €66,105 | €15,432 | €50,673 |
| 4 years | €62,055 | €22,698 | €28,349 | €66,504 | €89,027 | €20,993 | €68,034 |
| 5 years | €76,446 | €28,373 | €40,266 | €74,653 | €112,407 | €26,776 | €85,631 |
| 10 years | €140,808 | €56,745 | €103,516 | €104,137 | €236,514 | €59,353 | €177,161 |
| 15 years | €190,705 | €85,118 | €173,352 | €112,571 | €373,538 | €98,989 | €274,549 |
| 20 years | €223,290 | €113,490 | €250,455 | €96,425 | €524,823 | €147,211 | €377,612 |
The net cost of buying adds purchase costs, interest and upkeep, then subtracts the price gain net of resale costs, as if the flat were sold at the end of the year. The net cost of renting subtracts the deposit's gain from the rent. It is the method of the calculator linked to this guide, an educational estimate.
In year 1, buying costs €37,946 against €16,656: resale costs exceed the price rise. By year 20 the gap has turned, €281,187 in favour of buying under these assumptions.
Over twenty years, under these assumptions, buying costs €96,425 and renting €377,612, and almost all of it rests on the assumed rise in prices.
Rent vs buy break-even: the year the curves cross
The break-even point is the first year the net cost of buying drops below the net cost of renting. In the example it is year 4: €66,504 against €68,034. Before that, selling costs more than having rented; after it, the gap widens every year.
The table reruns the calculation changing one assumption at a time.
| Assumption changed | Break-even point | Gap at 20 years in favour of buying |
|---|---|---|
| None (base case) | Year 4 | €281,187 |
| Loan rate at 3.10% | Year 4 | €315,274 |
| Loan rate at 3.99% | Year 5 | €253,953 |
| Stable prices (0% a year) | Year 19 | €13,708 |
| Prices up 1% a year | Year 9 | €134,907 |
| Prices up 3% a year | Year 3 | €457,413 |
| Deposit invested at 2% | Year 3 | €368,339 |
| Deposit invested at 6% | Year 6 | €155,618 |
| Without the Bëllegen Akt | Year 9 | €194,371 |
| Rent of €1,500 | Year 7 | €193,716 |
The 3.10% and 3.99% rates are the two ends of the BCL release for May 2026, the variable rate and the 25-to-30-year fixed rate. They move the break-even point by one year at most.
Price growth weighs far more: at 0%, buying takes nineteen years to catch up with renting. The base case's 2% is an assumption; the Observatoire's report on the first quarter of 2026 measures +0.9% over a year for existing flats and +1.7% for all homes.
The loan rate shifts the break-even point by a year; price growth moves it from year 3 to year 19.
Rent or buy as a couple, a cross-border worker or a landlord
The tax credit counts per person, as the indirect tax portal states. For two buyers, €80,000 covers the duties up to a price of €1,142,857; the first table shows €4,000 of duties on a €1,200,000 home.
The credit assumes the buyer lives in the home. Guichet.lu's page opens it to any individual buying a home to live in, including someone who still lives abroad when the deed is signed, provided they move in within the deadlines. A cross-border worker buying in their country of residence falls under that country's duties and fees, which this guide does not quantify. A property bought to rent out does not qualify: the full 7% applies.
The Bëllegen Akt counts per person and requires living in the home: it is what brings the example's duties down to €100.
What the break-even point leaves out
The model invests the renter's deposit, not the monthly difference. The owner in the example pays €2,297 a month on the loan and about €473 in upkeep, the renter €1,800 in year 1. Over twenty years that cash-flow gap reaches about €140,000. Invested at the same assumed 4%, it would earn some €92,000, and the gap at twenty years would fall from €281,187 to about €189,000.
Tax is missing too. Interest on a loan for the main residence is deductible within annual ceilings, according to Guichet.lu's page on financing costs, and investment gains are taxed according to the country of residence. The example counts neither.
And prices do not rise in a straight line. The Observatoire de l'Habitat records a fall of about 15.7% in flat prices between Q3 2022 and Q4 2023. Every amount is in nominal euros, without inflation.
The break-even point comes out of a model: it is only as good as the assumed price growth, the assumed return and what the renter does with the difference.
Frequently asked questions
Is it better to rent or buy in Luxembourg?
It depends on how long the home is kept and how prices move. In this guide's example, buying becomes cheaper during year 4 with prices assumed to rise 2% a year, and during year 19 with stable prices. It is a calculation, not anyone's personal situation.
How much are the buying costs in Luxembourg?
Duties are 7% of the price, from which the Bëllegen Akt takes off up to €40,000 per buyer who lives in the home, with a minimum of €100. On top come the notary's fees, on a regulated tariff, and a 0.05% mortgage registration duty.
What is the Bëllegen Akt?
It is a tax credit against registration and transcription duties, for individuals who buy a home to live in. It has been €40,000 per person since the law of 3 July 2025, provided the buyer moves in within two years and stays at least two years. A rise to €45,000, announced in July 2026, will apply retroactively from 16 July 2026 once the law is passed.
How many years until buying beats renting?
In this guide's example the break-even point ranges from year 3, with prices rising 3% a year, to year 19, with stable prices.
Key points
- In Luxembourg, buying a home carries 7% in duties, from which the Bëllegen Akt takes off up to €40,000 per buyer who lives in it.
- In a mortgage payment only the interest is a cost; the capital repaid ends up in the value of the home.
- For a €567,450 flat against a €1,800 rent, with the deposit invested at an assumed 4% and prices assumed to rise 2% a year, buying becomes cheaper than renting during year 4.
- Assumed price growth moves that point far more than the loan rate: from year 3 to year 19 between 3% and 0% a year.
- Investing the renter's monthly difference as well would bring the 20-year gap from about €281,000 to about €189,000.