Relocation intelligence

🇱🇺 Moving to Luxembourg: tax, residency and cost of living

Progressive worldwide income tax (class 1 up to 42%) with a 7% to 9% solidarity surcharge, effective top rate 45.78%.

Thinking of moving to Luxembourg? Here is the tax, residency, property and quality-of-life picture in plain numbers, with sources.

Key facts

Top income tax
45.78%
Corporate tax
24.94%
Capital gains
0%
Wealth tax
No
Inheritance tax
Yes
Cost of living index
82
Safety
8/10
Internet quality
9/10
Visa-free destinations
186
Foreigners can own property
Yes
Residency in
6 months
Citizenship in
5 years

Taxes

Tax class 1 (single) is progressive from 0% (up to EUR 13,230) to 42% (above EUR 234,870), plus a solidarity surcharge of 7% on the tax, rising to 9% above EUR 150,000 of taxable income, giving an effective top rate of 45.78%. Employee social contributions: pension 8.5%, sickness 3.05% (both capped at EUR 162,224/year and deductible) and dependency contribution 1.4% (uncapped, non-deductible, after a 25%-of-minimum-wage allowance).

Residency and visas

EU/EEA citizens can settle and register freely; third-country nationals apply for a residence permit (usually within a few months). Naturalisation is possible after five years of residence. No golden visa or citizenship-by-investment.

Property ownership

Foreigners may buy residential real estate without restrictions; there are no nationality restrictions on ownership.

Cost of living and quality of life

Very high standard of living, multilingual (Luxembourgish, French, German, plenty of English), safe and central in Europe, but with very high housing and living costs.

Passport and mobility

The Luxembourg passport ranks 3rd in the 2026 Henley Index with 186 visa-free destinations. As an EU/EEA member, free movement applies within the EU.

Why people move to Luxembourg

  • Stable EU hub with strong services

    Luxembourg offers EU membership, free movement, excellent healthcare and internet, one of the strongest passports (186 destinations) and top-tier banking for international entrepreneurs.

  • No wealth tax and favourable capital gains

    There has been no individual wealth tax since 2006 and capital gains on movable assets held longer than six months are exempt, attractive for investors.

Honest trade-offs

  • De woningprijzen en huren in Luxemburg behoren tot de hoogste van Europa, waardoor betaalbare huisvesting zeer schaars is en veel werknemers over de grens in Belgie, Frankrijk of Duitsland wonen.
  • Het effectieve toptarief van de inkomstenbelasting bedraagt 45,78% (42% plus 9% solidariteitstoeslag boven EUR 150.000), waardoor het belastingvoordeel voor hoge inkomens beperkt is.
  • Door de pensioenhervorming is de werknemerspremie voor pensioen per 1 januari 2026 verhoogd van 8% naar 8,5%, waardoor de totale sociale premies voor werknemers naar ongeveer 12,95% stijgen.
  • Luxemburg belast inwoners op hun wereldwijde inkomen (geen territoriaal stelsel) en kent nog steeds successierechten voor niet-directe erfgenamen.

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Sources

Other destinations

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