Renting in Luxembourg: what tenants should know about caps and deposits

Luxembourg's rental market is tight and expensive, but it is also more regulated than newcomers expect. Tenants have real protections in law — and knowing them is the difference between a fair tenancy and an exploitative one.

The rent ceiling

In principle, annual rent for an older dwelling is capped in relation to the capital invested by the landlord in the property. The rule is intended to stop rents drifting arbitrarily above what the home is worth. In a hot market it is not always easy to enforce, but it gives tenants a legal basis to challenge an excessive rent before the communal rent commission.

The deposit

A security deposit is standard, but the law limits it. A guarantee may not exceed the equivalent of a few months' rent, and it must be returned, less any justified deductions, at the end of the tenancy. Tenants should insist that the deposit is documented and, where possible, held in a way that protects it.

Before you sign

Read the lease carefully, note who pays which charges, and record the condition of the property in a signed inventory (état des lieux) at move-in and move-out — it is the single most important document in any later dispute. If a disagreement cannot be resolved, the local rent commission and, ultimately, the justice of the peace are the avenues for redress. None of this makes Luxembourg cheap to rent in — but it does mean tenants are not without rights.