Financing a property purchase in Luxembourg

In Luxembourg, loan-to-value limits are set by CSSF Regulation 20-08. A first-time buyer purchasing a primary residence can borrow up to 100% of the price; for other primary-residence buyers the reference limit is 90% (with some flexibility left to banks); for buy-to-let purchases, 80%.

In practice, banks work with a repayment burden of roughly one third of net household income, and a property loan (mortgage) typically runs up to 30 years. You can approach a bank directly, or work with a mortgage broker who compares several lenders on your behalf. Your own funds should at least cover acquisition costs — often more outside first-time purchases.

The “Bëllegen Akt” is a tax credit on registration and transcription duties: up to €45,000 per buyer (€90,000 for a couple) when purchasing a primary residence. In practice, most first purchases pay little or no registration duty.

For an off-plan purchase (VEFA) intended as your primary residence, the super-reduced 3% housing VAT applies to construction works, capped at a tax advantage of €50,000 per dwelling.

Mortgage interest is also tax-deductible, with annual per-person ceilings that decrease with years of occupancy. Subject to income conditions, the State also offers housing aids and a State guarantee to top up an insufficient down payment.

On existing property, expect 7% in duties (6% registration + 1% transcription) — before the Bëllegen Akt is applied — plus notary fees and mortgage registration costs. Off-plan, duties apply only to the land share; construction is invoiced with VAT.

Add the outstanding-balance insurance required by the bank for any mortgage or property loan, and, where applicable, bank arrangement fees. We build a complete, line-by-line financing plan with you before any offer — whether you go directly through a bank or via a mortgage broker.