Learn the basics about renting an apartment in Luxembourg as a dual citizen, the good, the bad, and the ugly.
What Should You Know About Renting an Apartment in Luxembourg?
Are you interested in moving to Luxembourg? Well, in most cases, you will probably be starting out by renting, rather than purchasing a home or apartment. While buying is an option as a dual citizen, the reality is that in Luxembourg you will find some of the highest real estate prices in Europe. Ultimately, the real estate prices are much higher than in most parts of in the USA.
Renting in Luxembourg works differently than the USA. There are several things you should know.
First, you should know that it will be generally much easier for you to rent an apartment if you are already have a job in Luxembourg.
Understanding the Rental Market
Luxembourg’s population has doubled since 1990. And therefore, the pace of building new houses simply has not been able to catch up with renter demand.
More and more people are moving to Luxembourg due to the high income and professional opportunities available. Therefore, the supply of real estate compared to the demand is low, especially in Luxembourg City. And for this reason, rental prices tend to be very high compared to most other cities in the US and Europe. Additionally, you will find that landlords tend to be pretty demanding.
Getting a Landlord’s Approval
The first thing that a landlord is going to want to see in Luxembourg is proof of income in Luxembourg, and this normally comes in the form of a what is called a CDI (contrat à durée indéterminée), or indeterminate duration contract. In Luxembourg, there are two main kinds of work contracts:
- CDD – contrat à durée déterminée, or contract of determined duration
- CDI – contrat à durée indéterminée, or contract of indefinite duration
Normally, landlords in Luxembourg expect their renters to submit a CDI (indefinite contract) which demonstrates income that is significantly more than the monthly cost of renting. It’s far more difficult to present a CDD contract because landlords fear that at some point you might no longer have an income. Because landlords usually consider multiple or even dozens of applications for their apartments, they usually will differ to someone with a CDI.
This is a challenge in particular to someone who is newly arrived in Luxembourg. Because of high cost and labor protections, companies are more hesitant to offer a new arrival to Luxembourg a CDI. They will be afraid that said individual is at a higher risk to leave the country or the company, which would be very expensive for the company. So many new arrivals only end up with a CDD at first, especially people early in their career (less than 1o years experience).
If you are an entrepreneur or moving to Luxembourg without a job, this is going to be a roadblock. Most landlords will therefore want you to pay six months rent up front.
Getting a Bank Account in Luxembourg
The other thing you need to know is that, in general, in order to get an apartment in Luxembourg, you need to have a Luxembourg bank account. This can be a frustrating thing for many dual citizens when they first arrive because, in order to open a bank account, you need to have a fixed address in Luxembourg, as well as a CDI contract. But, how can you get a bank account if you don’t have an apartment already? This presents quite the conundrum to dual citizens. Without a CDI and a fixed address, dual citizens born in the USA will also face extra challenges opening a bank account, due to FATCA.
Other Fixed Rental Costs
There are also often more costs involved in renting in Luxembourg than what you might traditionally expect in many cities in the United States. In Luxembourg, most landlords ultimately promote their apartments for rent through a real estate agency. The real estate agency will take 1 or 1.5 months of rent upfront in agency fees. Also, a rental deposit in Luxembourg is usually equivalent to 3 months’ worth of rent.
If you move to Luxembourg and you don’t have a CDI contract, landlords will usually require the real estate fee, the deposit, and 6 months’ worth of rent upfront, to guarantee that you will be there long-term. This can really add up.
On the Up Side
One major positive in Luxembourg compared to the US: it is often possible to negotiate for a 6 month lease vs. a 1 year rental lease. In the US, many leases always start on the first or 15th of a month. In Luxembourg, they can start on any day of the month.
Also, if you have no income back in the US and you are a dual citizen, you may qualify for government assistance with your rental deposit. There are also other assistance programs for rent and income that only citizens are eligible to apply for.
Check out www.immotop.lu to look into renting or buying a home in Luxembourg.
Let Us Help You Relocate
There are other important things to know about renting an apartment in Luxembourg, besides the cost, contract requirements, and potential issues with getting a bank account.
There are also cultural expectations from Luxembourgish landlords. For example, it is practically always a landlord’s expectation in Luxembourg that there be one separate bedroom for each child in the family. So, a landlord will be unlikely to rent a two-bedroom apartment to a family of four. Further, many landlords are unwilling to accept pets. There are many other things it is important to know when relocating to Luxembourg, and especially when it comes to finding housing.
Did you know that LuxCitizenship provides a relocation consultation service? We are more than happy to help you assess your decision to move to Luxembourg and how to make your dreams a reality.