Luxembourg has one of the most expensive property markets in Europe, but it also has one of the most generous tax mechanisms for first homes. Buying property in Luxembourg means two numbers to understand before you look at a single listing: the duties you pay and the credit you can deduct.
What do you pay when buying property in Luxembourg?
On the purchase of a home, the buyer owes 7% of the price in duties: 6% registration duty and 1% transcription duty. Your notary collects them for the Administration de l'enregistrement, des domaines et de la TVA (AED). That sits on top of the notary's own fees and any agency commission, so set aside a margin beyond the price.
The sequence is the usual one. You sign a compromis de vente (preliminary sales agreement), which binds both parties. You then sign the deed at the notary, who collects the duties and registers the sale. If you want the Bëllegen Akt, tell the notary at the signing.
What is the Bëllegen Akt credit?
The Bëllegen Akt ("the fair deed" in Luxembourgish) is a tax credit that offsets the duties for the purchase of the home you will live in. The credit works against the duties at the notary, so in practice you pay less at signing. Even with the credit, the AED always collects at least €100 of duties.
The ceiling has moved several times:
- €20,000 per person before 2023;
- €30,000 in 2023;
- €40,000 for deeds signed from 1 January 2024 to 30 June 2025, under the law of 4 April 2025;
- Bill no. 8540, voted by the Chamber on 25 June 2025, makes the €40,000 ceiling permanent for deeds from 1 July 2025, according to the Chamber's summary and the government's press release of 25 June 2025. The Guichet.lu page, last modified on 7 July 2025, shows €40,000 per person and does not mention the increase described below.
The credit is per person and cancels the duties only up to the ceiling, with the €100 floor in all cases. If two people buy together, ask your notary how the credit applies to each of you.
Is the credit going to be raised to 45,000 euros?
On 16 July 2026, the housing and finance ministers announced seven measures called "Booster fir de Wunnengsbau". One is a rise of the Bëllegen Akt from €40,000 to €45,000 per person for purchases of a main residence, from 16 July 2026. The government's page says the measure applies from 16 July 2026 and that buyers who sign between the announcement and the entry into force of the law can claim the increase by applying to the AED. It gives no bill number and does not say whether the law has been voted, and the Guichet.lu page still shows €40,000. Treat €45,000 as announced and not yet confirmed, and ask your notary which ceiling applies on the day you sign.
The same package announces a temporary exemption from registration duties on the building part of off-plan purchases, changes to housing subsidies for buyers aged 35 or under, an accelerated depreciation scheme for landlords and a housing bond to be launched in early 2027. Most of those are not in force yet. Check each one before you count on it.
Between the credit, the minimum duty, the occupancy conditions and an announced increase, the arithmetic of a first purchase is not obvious. Moovy can go through the official conditions with you and list what to ask your notary and your bank. It does not replace the notary, who does the legal work.
What conditions must you meet?
According to Guichet.lu:
- you must occupy the home personally and effectively within two years of the deed (four years for a building plot or a building under construction);
- you must stay for at least two years without a break;
- if you rent it out, sell it or leave it before those two years, you must repay the credit with interest at the legal rate;
- any transfer or change of use must be declared to the AED in writing within three months;
- exemptions can be requested for force majeure, serious illness, forced sale, expropriation, death of a spouse, or divorce.
This is why the credit is for a main residence and not an investment. If you are a cross-border worker who lives in France, Belgium or Germany, it applies only to a home in Luxembourg that you occupy as your main residence.
How much can the bank lend?
The CSSF rules on credits secured by residential property in Luxembourg set loan-to-value limits, in force since 1 January 2021: up to 100% of the value for the main residence of a first-time buyer; 90% for the main residence of other buyers (banks may exceed this for 15% of such loans, never beyond 100%); and 80% for other homes, including rental investments. A lender will still check your income and the loan's affordability. Remember that the duties and notary fees are not part of the home's value, so you will need cash for them even at 100%.
For a person who has just arrived, a lender may want to see a contract and a few payslips. Our guide to opening a bank account in Luxembourg explains the practical start.
What do buyers get wrong?
- Counting on a credit amount that has not been confirmed. Use the figure your notary gives you on the signing day.
- Renting the flat out too soon. The credit would have to be repaid with interest.
- Forgetting the minimum €100 of duties.
- Budgeting only for the price. Duties, notary and agency fees are extra.
- Buying before understanding rent. In a market this tight, comparing the monthly cost of renting and owning is worthwhile; read renting in Luxembourg and the cost of living in Luxembourg.
What does the process of buying property in Luxembourg look like step by step?
- Define your budget. Include the price, the 7% duties (less the Bëllegen Akt credit if it applies), notary fees, agency fees and a reserve for furnishing.
- Talk to your bank. Ask what loan-to-value ratio applies to you under the CSSF rules and what proof of income it needs.
- Find the home and make an offer. Check the energy performance certificate, the cadastral reference and the commune's rules.
- Sign the preliminary sales agreement (compromis de vente). It binds both parties, so read the conditions, in particular any clause about financing.
- Sign the deed at the notary. Ask for the credit at the signing if the home will be your main residence.
- Move in on time. Within two years (four for a plot or a building under construction), and stay at least two years.
What happens to the credit if your plans change?
The credit exists for people who will live in the home. Before two years of occupation are complete, renting out all or part of the property, transferring it or ceasing to live there triggers repayment of the full credit with interest at the legal rate. You must tell the registration administration in writing within three months of any transfer or change of use. Guichet.lu lists exemptions that you can request in cases of force majeure, serious illness, forced sale, expropriation, death of a spouse, or divorce. If your job might take you abroad within two years, discuss the risk with your notary before you sign.
Property tax is another running cost: owners pay a communal property tax whose rates are set by each commune and published in the official gazette. Rules and ceilings in this field change often, so confirm the current amounts with your notary and on guichet.lu before you sign.