Costs to be expected when purchasing a property

You are a resident or future expatriate in Luxembourg and wish to buy a property? How much will it cost you in the end? Are you wondering about the cost of notary fees or registration fees and the real estate loan?

Here you will find all the answers to your questions and can plan the purchase of your dream home at ease.

Calculate your notary fees with our integrated calculator below.

Registration fees or notary fees

When buying real estate in Luxembourg, additional financial costs are to be expected in addition to the sale price of the house or land purchased. Among these costs, the buyer will have to pay on the day of the signature of the deed of purchase, registration fees or otherwise known as “notary fees”. Calculate these costs to be included in your total budget.

Registration fees

The registration fees are calculated on the value of the land and the buildings on this land, up to 6% of the acquisition amount.

Thanks to the “Bellegen Akt”, the new buyer can benefit from a tax credit on these registration fees up to 20,000 euros per head or 40,000 euros for a couple . In this case, a flat fee of 100 euros applies.

To benefit from it, the new buyer must be a natural person and commit to living personally in his or her new principal residence for at least 2 years. In addition, he or she must not have previously benefited from this tax provision. If the property is rented out or resold beyond the time limit stipulated by the Bellegen Akt, the purchaser must pay the full 7% duty.

If the entire envelope of 20,000 euros per person is not used at the time of the first purchase of the principal residence, the remainder can be used at the time of a subsequent purchase until the end of the derogatory tax provision.

Notary’s fees and emoluments

A Grand-Ducal regulation sets the amount of the notary’s fees. These are equivalent to 1% of the amount of the acquisition (land and buildings).

The notary also invoices the expenses incurred by his office in order to complete the real estate transaction: requests for cadastral extracts or any other administrative document collected from organizations such as co-ownership syndicates or other administrations.

To know the registration fees and notary fees that you will have to pay when you sign your real estate purchase, you can use our notary fees calculator.

VAT applicable to constructions in future state of completion

In Luxembourg, when buying a property in a future state of completion, the purchaser must pay the value added tax on the property to be built.

If the property (apartment or house) is purchased as a primary residence, the purchaser benefits from a reduced VAT rate of 3% on the part of the property that is still under construction at the time of purchase. Beyond 50,000 euros of tax benefit, the rate applied will be 17%.

An investor who buys a property in a future state of completion with a view to renting it out will not be able to benefit from this tax break. He will automatically pay 17% VAT on the whole property still to be built.

Generally the prices posted by the promoters in new buildings are posted taking into account a VAT at 3%. The investor will have to recalculate the final price with the 17% VAT.

This same principle applies when you are doing work on your principal residence .

Cost of the real estate loan

When you take out a loan with a bank to finance your new property purchase, you will also have to pay financial fees. These are added to the overall cost of your acquisition.

Cost of credit

If you are unable to finance your entire real estate purchase, you can request financing from a bank or financial institution. After studying your personal file and your ability to repay, he will lend you a certain amount of money so that you can finance your acquisition. Generally a bank will lend you 30% of your income.

In return, you will have to pay back your credit monthly, taking into accountinterest charges to be added to the repaid capital.

You must also add the amount of the fixed application fee .

Mortgage fees

By lending the amount requested to finance a real estate acquisition, the bank ensures its repayment. The lending financial institution also accompanies its offer with a mortgage on the property in question. The purpose of this mortgage is to secure the loan in the event of a repayment default. The notary draws up the mortgage deed at the same time as the loan deed. This additional guarantee is registered at the Bureau des Hypothèques. These mortgage fees will be added to the costs to be paid to the notary. The amount of the mortgage loan granted determines the amount of these fees. Ask your bank for more information.

If the property is sold before the end of the loan period, the Bank will remove the mortgage from the Mortgage Office, which will generate new costs.

Outstanding Balance and Disability Insurance

To guarantee repayment in the event of death or disability, the bank will undoubtedly ask you to take out death and disability insurance, calculated on the amount of capital outstanding . This insurance will cover the repayment of the loan in case of death or disability of the buyer(s) before the end of the term. We advise you to take out this insurance. Under certain conditions, these insurance premiums can be deducted for tax purposes.

On the ING Bank website, you will find a simulator that will allow you to easily calculate the cost of your real estate loan based on the total amount of your real estate acquisition project and your personal contribution. You will also be able to calculate the monthly payments you will have to pay each month, depending on the credit you have taken out.

Other real estate calculation tools

You will find on the website, in the “Tools” section, several tools allowing you to calculate your real estate acquisition project: costs and monthly acquisition expenses. You will also be able to assess whether it is better to sell or rent your house, or what real estate acquisition you can afford according to your income.

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