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Buying a secondary residence abroad takes planning

Buying a secondary residence for a peaceful retirement or a holiday with your family can be the dream of a lifetime. Like when buying a property in Luxembourg, purchasing a house abroad takes careful consideration.
Before diving in, find out about how the real estate market is doing in the country you want to buy your holiday home in. This will help you make a well-considered investment.

Next, set your budget. Consider:

  • how much you can afford to repay now and in the future
  • potential purchase costs abroad
  • taxes and potential duties in the country of purchase
  • secondary home insurance.

Once your project has been thought through, get in touch with industry professionals to estimate the cost of the works or construction of your property. If you’re building your home, look into the quality of builders abroad. It’s also common practice to ask for a warranty from the builder or developer, to avoid any nasty surprises.

Solutions for financing a secondary residence

Quite often, buying a secondary residence really begins to take shape once you sign the mortgage (1).

Thanks to its extensive range of financing solutions, BGL BNP Paribas can help make your plans a reality. Our advisors will guide you towards the solution best suited to your situation, the type of property you want to buy and your repayment capacity. Type of interest rate, loan term, repayment schedule: it's all tailored to you!


Depending on the country where the property is located and its laws, you could be entitled to potential tax benefits. Ask a notary or other competent professional for more information.

Conditions for buying a secondary residence

Our only condition for financing a holiday home abroad through a real estate loan is already owning a home in Luxembourg, so that the bank can take out a mortgage of equivalent or higher value on this property. Otherwise, you’ll have to provide equity, securities or cash to guarantee the purchase.

Good to know

The bank cannot take pension insurance as a guarantee. However, your employer’s supplementary pension insurance can be taken as a guarantee. Ask your employer for more information.

(1) Offer subject to terms and conditions and approval of your application by the bank.

Frequently asked questions

  • icone faq question
    Can I deduct interest on the loan granted to finance my secondary residence?

    Interest on foreign properties cannot be deducted from taxable income in Luxembourg. However, the interest and rental income from this property must be taken into account when determining your Luxembourg tax rate (although this income is not taxable in Luxembourg).
    The tax treatment for debit interest on a property located abroad is governed by tax provisions applicable in the country in question. Contact a tax expert to find out about the applicable laws in the country where your property is located.

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