Rental Deposit (“Caution”) in Luxembourg: 2025 Complete Guide

Quick answer

In Luxembourg new leases have a deposit capped at two months of base rent. You can use cash, a bank guarantee, a state backed guarantee, or insurance. Half of the deposit must be returned within one month of the check out inventory and the rest within one month of the final utilities statement.

• New to the process? Read our how to rent in Luxembourg guide for the full step by step plan.

As of Aug 1, 2024, the rental deposit in Luxembourg is capped at two months of base rent, charges excluded. This guide explains cash deposits, bank and state guarantees, the legal deadlines for getting your money back, and the exact steps to protect your deposit.

In Luxembourg, new leases signed from Aug 1, 2024 have a deposit, also called caution or garantie locative, capped at two months of base rent. You can pay cash to the landlord, use a bank guarantee with or without blocking funds, apply for a state-backed guarantee if eligible, or use rental guarantee insurance. At move-out, the landlord must return 50 percent within one month of the check-out inventory and the rest within one month of the final utilities statement. Penalties may apply for unjustified delays.

Overview: what the “caution” is

The rental deposit is security for the landlord against unpaid rent, damage, or other lease breaches. Choosing the right option is a balance of security, fees, and cash flow.

The law in 2025: what changed

Maximum amount

Since Aug 1, 2024, the maximum deposit is two times the base rent, charges excluded.Example: €1,500 rent plus €200 charges gives a maximum deposit of €3,000, not €3,400.

• For current budgets, see Luxembourg City rent prices 2025

Who holds the deposit

• Cash deposit: usually held by the landlord. Always get a signed receipt.
• Bank guarantee: funds are blocked in your bank account and the landlord receives a certificate.
• State guarantee: the state acts as guarantor for eligible tenants.

Your options at a glance

• Cash deposit
• Bank guarantee with deposit
• Bank guarantee without deposit
• State-backed guarantee
• Rental guarantee insurance

Option details

Cash deposit

Simple and fast. No ongoing fees. Ties up cash and gives you less control in disputes. Always obtain a signed receipt.

Bank guarantee with deposit

Funds are blocked in your account. Typical fees around 0.25 percent per quarter plus a small setup fee. Processing about one to three business days. Many guarantees are “first demand”.

Bank guarantee without deposit

Available with approval for students, newcomers, or under 30. Zero upfront deposit but higher fees around 0.5 percent per quarter. Processing two to five business days.

State-backed guarantee

For low income households that meet eligibility rules. No upfront cash, but you must save the full deposit amount over 36 months in a conditional account. Processing two to four weeks.

Rental guarantee insurance

Annual premium, usually €150 to €300, instead of a deposit. Requires landlord approval. Premium is not refundable.

Timeline from signing to deposit return

• Lease signing, choose and arrange your deposit method.
• Check-in inventory, document condition and meter readings with photos.
• During tenancy, tenants handle minor maintenance, landlords handle structure and major systems.
• Notice to vacate, minimum three months, give notice in writing.
• Check-out inventory, clean, repair tenant-caused damage, record final meters, return keys.
• Deposit return deadlines, 50 percent within one month of exit inventory, balance within one month of final utilities statement. For bank guarantees, return the original certificate or get a signed waiver.

Normal wear versus damage

Wear and tear, not chargeable

• Faded paint
• Minor wall scuffs
• Small nail holes
• Traffic wear on carpets
• Light scratches on floors
• Age cracks
• Faded blinds

Tenant-caused damage, chargeable

• Large holes
• Burns or deep stains
• Pet damage
• Broken tiles or fixtures
• Watermarks from overflow
• Unauthorised painting
• Heavy dirt requiring professional cleaning

Five ways to protect your deposit

• Document everything with photos or video and timestamps
• Communicate in writing and keep records
• Maintain the property and fix small issues early
• Record meter readings at move-in and move-out with dated photos
• Know your rights and use formal demand letters when needed

Required documents checklist

Essential

• ID or passport
• Residence permit if needed
• Last three to six payslips
• Employment contract
• Recent bank statements
• Previous landlord reference
• IBAN
• Tenant liability insurance
• Social security certificate

Recommended

• Cover letter
• Employer reference
• Guarantor details
• Past tax returns
• Proof of clean rental history

FAQs

What is the maximum deposit in Luxembourg

Two months of base rent, charges excluded, for leases signed from Aug 1, 2024.

How long until I get my deposit back

Fifty percent within one month of the check-out inventory and the rest within one month of the final utilities statement, unless there are justified deductions.

Can the deposit cover utilities and repairs

Yes. It can cover unpaid rent and charges and tenant-caused damage with invoices. It cannot cover normal wear or landlord maintenance.

Are furnished deposits higher

Rents are usually higher and deposits may reflect furniture value, but the legal cap is still two times base rent for new leases.

Can I switch from cash to bank guarantee mid-lease

Only with landlord agreement and a written amendment. It is easier to choose your method before signing.

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