Because of high property prices, more and more Luxembourgers move across the border (Photo : ING Luxembourg)

Because of high property prices, more and more Luxembourgers move across the border (Photo : ING Luxembourg)

The phenomenon is increasing every year. Because of high property prices, more and more Luxembourgers move across the border and become atypical cross-border workers[1]. As a result, one in seven new cross-border commuters from Germany, Belgium or France is a Luxembourg national. As an expatriate, do you have to follow the same example? What are the pros and cons of becoming a cross-border worker?

First of all, you have to know if you are allowed to move across the border. For example, if you are an EU citizen or come from Iceland, Liechtenstein, Norway and Switzerland, you can work in Luxembourg and reside in Belgium, France or Germany. If you are a third-country national, you will need a visa or permit for residency in the neighbouring country.

The pros

Living in Belgium, France or Germany has one big advantage: becoming a homeowner becomes an accessible dream. The cost of housing is considerably cheaper outside Luxembourg's borders. For example, a flat will cost an average of 627,028 euros in Luxembourg (all regions combined) compared with € 221,996 in Belgium, € 166, 363 in France and € 291,631 in Germany. The difference between the extremes ranges from one to four times!

Secondly, the cost of living is more attractive. According to Expatistan, a collaborative platform for expatriates that compares the cost of living between more than 2,473 cities and 231 countries worldwide, Luxembourg, particularly its capital, far outstrips the regions of neighbouring countries in everything. It goes from food - mainly Germany, where the difference can be as much as 31% in Saarbrücken - to clothing - France is much more advantageous with a -37% price advantage in Metz. The only notable exceptions are transports, free in Luxembourg since 1 March 2020, petrol, cigarettes and electronic products.   

Your tax situation does not change. Luxembourg has double taxation agreements in place with bordering countries. You will continue to pay your taxes in the Grand-Duchy, even if you are self-employed provided that you have a fixed business base in Luxembourg. If your spouse works locally, he or she will be taxed in the country of residence or country of employment if this differs. You are still entitled to healthcare and family benefits such as monthly child allowances (or the differential supplement if they are already paid in your country of residence). If you lose your job, you can claim unemployment benefits but only from your country of residence. New rules will come into place in 2026, where you will be entitled to unemployment benefits from Luxembourg provided that you worked in the country for an uninterrupted six-month period before losing your job. 

The cons

Commuting to and from work is becoming increasingly problematic as the number of cross-border workers grows. The motorways leading to Luxembourg are saturated, as is public transport. The case of France, where the majority of border workers are concentrated, is particularly revealing. According to a study carried out by the Luxembourg Institute of Socio-Economic Research (LISER), the transport time budget, which represents the total time spent travelling during a working day, amounts to almost two hours. In contrast, the average is 1h07 for French workers working in France. In addition to the length of the journey, traffic congestion and the various hazards of the road force border workers to leave home very early: more than 50% of them leave home before 7 a.m. This fast-paced lifestyle, marked by long journeys between home and work, combined with family life management, encourages people to withdraw into themselves and their homes. Becoming a cross-border worker means that there will be very little time left for secondary activities other than work and domestic tasks. 

The increase in the number of frontier workers also impacts property prices in the border areas. Unfortunately, these are rising more and more and the trend is unlikely to stop in the coming years. As a result, the chances of finding affordable housing will diminish over time.

So, is becoming a cross-border worker a good or bad idea? Answering this question is not easy, as it will vary from one person to another. Some put up with the sometimes long and arduous journeys, others do not. Some integrate easily into their new environment, others do not.

What about teleworking?

There is still the option of teleworking, but this is not yet significantly developed in Luxembourg. Moreover, in this case, it is better to stay in Luxembourg, in a region where property prices are much lower, if only for tax reasons. Bilateral agreements, which avoid double taxation, only allow a limited number of working days outside Luxembourg. This is currently 19 in Germany, 24 in Belgium and 29 in France, excluding extraordinary measures related to Covid.

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[1] An atypical cross-border worker is someone who becomes a frontier worker in his own country.