With ever increasing prices in Luxembourg, can we really affirm that real estate is too high?

It is undeniable that a huge surge has taken place in the last decade, but when compared with European capitals and economic centres, the country is somewhat “cheap” (no, this is not the Luxembourg Wurst).

The average selling price per square metre is € 8,340 in Paris, € 8,861 in Geneva, and often well over € 10,000 in London. A lot higher than Luxembourg’s € 6,968 per square metre. Basically, you can get a 2 bedroom here for the price of a 1 bedroom in another capital!

Furthermore, several measures were put in place by the state of Luxembourg to help facilitate the access to property.

Among these is the Bëllegen Akt, a tax credit of € 20,000 per person (€ 40,000 for a couple) that is deductible from stamp duty, a considerable financial benefit for first-time buyers. The same € 500,000 property would therefore only cost you € 501,750 in Luxembourg, whereas it would amount to € 536,000 in Paris and around € 545,000 in Brussels.

The cost of holding property is also very low. Property tax is usually minimal (more or less € 150 for a € 500,000 apartment) and housing tax is inexistent. Local taxes in comparable cities such as Paris or London are never under € 1,000.

It takes about two years in Luxembourg for a home purchase being profitable compared to a rental, when it takes at least 6 years only to cover the acquisition costs in France.