Renting a property in Luxembourg

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When you move to Luxembourg, you may choose to either rent or buy a property. The two options come with different concerns which we herein expound.

Buy or rent a property?

Most people, especially foreigner, rent their homes. Properties are hard to find. Monthly rents range from 1,200 Euros for one bedroom to 2,300 Euros for 3 bedroom apartments.  On the other hand, the property goes for an average of 5,130 Euros per square meter as of 2015 and is continually rising. Selling the property before 2 years after purchase implies that you’ll incur capital gains tax. Selling it after 2 years attracts tax at half the standard rate.

Finding rent property

Rent property is more as compared to family houses in Luxembourg. They are let unfurnished although some specialized companies offer furnished ones.

In cases where you take up a furnished property, fill an inventory form which specifies the condition of fixtures and fittings. The cost of furnished apartments should not exceed twice that of unfurnished ones.

Rent property can be found through estate agents or agency websites, relocating agency, property portals or in the local newspaper.

Rental contract documentation

A rental contract is signed after finding a rental property. The local languages used are French, German and Luxembourgish. The documents are written in these three languages and you will need a translator if you do not understand any of them. The landlord will need proof of your identity. Some of them will ask for as much as your employment status, income level and reference from other landlords.

Agree on a fixed rental term with your landlord and inquire on standard charges such as concierge wages, shared utilities, and maintenance. Read the agreement and be clear on the contract termination conditions, responsibilities of the tenant and landlord and have the landlord provide an energy performance certificate.

Rent costs

Tenants pay a deposit that’s twice or thrice the rent amount. Annual liability insurance of 250 euro is also paid. Generally, the monthly rental costs are:

  • 876 Euros – studio flat
  • 1,400 Euros – 2-bedroom apartment
  • 2,500 Euros – 4-bedroom house

You can always seek financial assistance for the state if you don’t have funds to pay.

Moving in and out

Before moving in, the tenant and the landlord take inventory of the state of the property. This enables the landlord to reclaim all or a portion of the tenant’s deposit in case of damages. A registered independent party can prepare the inventory at a cost.

Unless otherwise stated in the contract, you can issue three months notice to terminate your lease. After completing the inventory and returning the keys, you are entitled to reclaim your deposit. You can negotiate with the owner and find a new tenant for the property who will move in as you move out to save them from agency fees.

Tenants’ rights

Tenants are expected to hand the property back in the state in which they received it. General wear and tear do not affect the deposit.

Rent increases annually based on the standard index provided in the official gazette. These rules are not followed by luxury property. Homes that are formally classified as luxury property increase rent at a rate agreed by the landlord and tenant.

A disagreement between landlord and tenants can be resolved without having to go to court by involving bodies that have been put in place for this one reason.

Housing benefits and assistance

Luxembourg housing fund provides rental housing for applicants with low income countrywide. Successful candidates have their rent subsidy calculated based on their annual disposable household income and hospitable space within the property.

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